Institution-focused digital asset technology and trading firm BlockFills is collaborating with CoinDesk Indices to launch options tied to the CoinDesk 20 Index (CD20).
The CoinDesk 20 Index, which debuted a year ago, measures the performance of leading digital assets, catering to institutional demand for diverse tradable products beyond bitcoin (BTC) and ether (ETH). The availability of options means traders can speculate on volatility and time in addition to price direction, bringing professional liquidity to the index.
Options are derivative contracts that give the holder the right to buy or sell the underlying asset at a predetermined price on or before a specific date. The ongoing crypto bull run, led by the institutionalization of bitcoin, has seen investors embrace options tied to BTC and crypto-linked products, including alternative investment vehicles like spot ETFs.
“As the digital assets market continues to mature, qualified institutional market participants are demanding a foundational reference index to trade, invest and measure performance,” said Perry Parker, head of options trading at BlockFills.
Institutions are already participating in BlockFills’s CD20 options, with digital asset manager and multi-strategy crypto fund Hyperion Decimus executing the first transaction this month.
This also marks the first OTC options trade on a digital asset index between onshore counterparties in the U.S., making this a significant milestone in the OTC derivatives market due to extra regulatory oversight in such domestic transactions.
“The BlockFills CoinDesk 20 index options market is a unique solution for professionals managing a portfolio within this asset class, and we are thrilled to kick off trading of the product,” said Chris Sullivan, Principal at Hyperion Decimus.
“Prior to the CoinDesk 20, there was no agreed upon, liquid and diversified benchmark, which answers in part why an index option has not been traded until now,” Sullivan added.
UPDATE (Jan. 30, 15:21 UTC): Adds additional context about the first OTC options trade in the U.S. and comments from Chris Sullivan.
