Markets
GSR and Wealth Manager St. Gotthard execute options trading on the CoinDesk 20 index
Cryptocurrency trading firm GSR said today that it has completed an options transaction based on CoinDesk Index 20 (CD20) with counterparty the asset manager St. Gotthard Wealth based in Zug.
“Options are a powerful tool for managing risk and volatility,” said Rich Rosenblum, co-founder and co-CEO of GSR, in a statement shared with CoinDesk. “We are excited to continue to play a central role in the expansion of this market.”
CoinDesk 20 was launched in January. It is a cryptocurrency market benchmark that measures the performance of major digital assets, similar to the S&P 500 or Dow Jones Industrial Average for U.S. stocks. The largest components of CD20 are bitcoin, at 30%, ether at 19%, SOL at 19%, and XRP at 7%.
“While the BTC and ETH options markets are now sufficiently evolved, investors have not yet found a way to price or hedge against risk from the broader cryptocurrency market,” Ruchir Gupta, head of options and treasury at GSR, said in an email to CoinDesk.
“Crypto-index derivatives like CD20 offer investors the opportunity to manage their exposure to the broader market in an efficient format,” Gupta said.
Having a vibrant futures market is often seen as a prerequisite for options. Bullish, the cryptocurrency exchange that owns CoinDesk, offers perpetual futures contracts tied to the CoinDesk 20, allowing traders to make bets on the broader market. So far, the CD20 index has generated about $6 billion in perpetual futures volume over the past six months.
The CD20 traded above 2,000 throughout the Asian business day on Wednesday, up 2% in the past 24 hours.