Tim Draper and Pantera Capital invest in new crypto exchange for derivatives
The increased interest of institutional investors is spurring new crypto projects.
Some of the major players in the crypto industry are supporting a new trading platform for crypto-derivatives, which could indicate that the current upward trend is primarily driven by increased interest from institutional investors.
This crypto trading platform, called Globe, has already raised $3 million in seed capital to build the Globe Derivative Exchange in a first round of financing. The declared goal of the platform Crypto Nation Pro for derivatives trading is to provide institutional investors with access to the crypto-market. Early investors in the project already include major names such as billionaire and crypto investor Tim Draper, block chain investment firm Pantera Capital and venture capitalist Y Combinator.
Pantera manager Paul Veradittakit confirms that the increased interest of institutional investors in crypto currencies is the main reason for his company’s investment in Globe.
Veradittakit told us
„There is a wave of interest in crypto-currencies coming from major banks, Fintech companies and investment firms. Globe has developed a platform and products tailored to this highly professional clientele. […] We are delighted to be able to support the Globe team in building a future-oriented platform for the crypto-financial system“.
Globe has developed a proprietary matching and risk assessment engine called Thor. According to the company, Thor was designed by developers from several major financial institutions, including JPMorgan Chase, Bank of America Securities, Citibank, UBS and Getco.
Trading in crypto-derivatives has increased significantly this year, as evidenced by the increased volume of trading in crypto-futures on platforms such as BitMEX, HuobiDM, OKEx and Binance. The increase in derivatives trading is a clear indication of how the crypto industry has evolved over the last three years.
According to a new study by the crypto exchange Kraken, the market for crypto derivatives „is now at least 4.6 times larger than the spot market“. The spot market is the market where crypto-currencies are traded directly and not the financial products based on them.
Kraken sees the availability of leverage as one of the driving factors for the attractiveness of derivatives trading. Globe states on its own website that it offers up to 100 times leverage.
As a reminder, leverage in trading refers to a literal leverage effect that enables higher profits to be achieved through the use of debt capital. However, this is also associated with an increased risk.