Fireblocks and X-Margin Partner to Offer Crypto Derivatives

Even as most laymen are still wrapping their heads around the basic concept of cryptocurrencies, investors are already taking the possibilities to the next level. One example of this is crypto derivatives, which have gained popularity as of late despite some risks and limitations that the current trading platforms hold. Now, Fireblocks has announced integration with X-Margin that will make these types of derivatives more secure.

As a press release detailing the arrangement explains the combined efforts, X-Margin’s ability to eliminate counterparty risk coupled with Fireblocks’ method of securing collateral and automating settlements, make crypto derivatives far attractive to institutional investors. Thus, this offer will now “allow the trading of derivatives on any asset, using any form of collateral while receiving cross-margin benefits across counterparties.” Both companies already have an impressive track record in their respective fields, with Fireblocks secured transfers of more than $70 billion in digital assets and X-Margin having previously partnered with the likes of Gemini, Polychain Capital, and many others.

The integration of Fireblocks and X-Margin comes as cryptocurrency derivatives are growing significantly. According to figures from TokenInsight, crypto derivatives saw a trading volume of $2 trillion during just the first quarter of this year. What’s more, that’s up more than 300% from the quarterly average observed across 2019. That said, Fireblocks notes that institutions may require greater security before they feel inclined to participate in such transactions.

Reflecting on his company’s partnership with Fireblocks and why it’s so important, X-Margin CEO Darshan Vaidya commented, “The derivatives market has always been attractive for larger investors, but one of the biggest hurdles they needed to overcome has to do with capital efficiency, custody and security. Working with Fireblocks to grow X-Margin’s distributed clearing network is an obvious and natural fit given the number of institutional trading firms actively using Fireblocks.” Vaidya added, “The partnership allows institutional trading firms to cross margin and bilaterally trade derivatives without compromising security.” It also seems that the result of the partnerships is gaining fans, with LedgerPrime CIO Shiliang Tang remarking, “The Fireblocks/X-Margin integration perfectly combines cross-platform collateralization, risk transfer, and settlements into one comprehensive package that encompasses the whole life cycle of a trade. This has been a crucial infrastructure piece that has evaded the institutional digital asset markets until now.”

With crypto derivatives already seeing explosive growth, this new offering from Fireblocks and X-Margin is poised to make them even more popular. Of course, that’s also a big win for both companies, as they’ve already seen JST Capital, XBTO, and the aforementioned LedgerPrime utilizing their platform. Therefore, expect the digital asset derivatives market to blossom even more as institutional investors get in on the action.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Robinhood Reveals More Details on Upcoming Retirement Account

After officially announcing plans for retirement accounts during an earnings call last month, Robinhood has now revealed more details about the upcoming feature and opened a waitlist for customers. First, Robinhood Retirement will offer both Roth and Traditional IRAs to users. With these accounts, customers will be able to invest in stocks and ETFs. Additionally, accountholders will be able to craft a custom portfolio and will be able to view...

Discover Announces 5% Bonus Categories for First Quarter of 2023

The popular Discover It card — which features 1% on all purchases as well as a slate of bonus rotating categories each quarter — has revealed what purchases will earn cardholders that 5% bonus starting January 1st. For the first quarter of 2023, Discover It cardholders can earn 5% back on grocery store, drug store, and select streaming service purchases. However, there are a few asterisks to note with this offer....

AllWork Raises $4.9 Million From FINTOP Capital 

A FinTech focused on freelancer payroll has closed a significant early-round investment. This week, AllWork announced that it had raised a $4.8 million round. The Series A was led by Nashville-based FINTOP Capital with no other participants. As a result of the transaction, FINTOP's Chris Haley and Rick Holton will join AllWork's board of directors. Previously, AllWork closed a $3.8 million seed round in 2019, bringing their to-date funding total to $8.7...