- In an exclusive interview, CEO Jamil Nazarali says the crypto exchange plans to offer Bitcoin derivatives.
- CEO says Wall Street-backed exchange plans to offer perpetual futures.
- The move means EDX will compete with BitMEX and OKX.
In a move to capture more institutional investors, EDX Markets, the new crypto exchange backed by Wall Street giants, is planning to establish a “substantial footprint” in Singapore this year, CEO Jamil Nazarali told DL News in an interview this week.
The exchange, which is backed by Fidelity Digital Assets, Citadel Securities, and Charles Schwab, also plans on pushing into the crypto derivatives market.
Derivatives such as Bitcoin and Ethereum futures contracts account for almost three-quarters of the total crypto market, according to CCData. With the approval of spot price Bitcoin exchange-traded funds in the US in January, derivatives trading volume surged more than 35%.
Yet Nazarali said it’s difficult to play in that marketplace from a US base.
“If we move outside of the US, the list of tokens that we can trade is much larger because of the greater regulatory clarity outside of the US,” he added. “We do think that the size of the opportunity is much larger outside of the US than it is inside the US.”
Perpetuals
To be sure, crypto derivatives are a robust market in the US. CME Group, which introduced Bitcoin futures contracts in 2017, executes about $4 billion a day in trades.
Nazarali said a Singapore-based exchange will open the door for offering perpetual futures, a popular derivative form of crypto assets that typically uses leverage to maximise returns.
The contracts allow investors to bet on the future prices of Bitcoin and other assets and automatically rollover their investments when their terms expire.
“That’s something we can’t do in the US,” Nazarali said.
BitMEX and OKX, both of which operate out of Asia, have built major franchises in the crypto derivatives space, and Binance plays there, too. They will become EDX’s new competitors.
Regulatory approval
Nazarali praised Singapore’s strong regulatory framework, its position as a global financial capital, and supply of talent.
EDX plans to receive full regulatory approval from the Monetary Authority of Singapore within the next 18 to 24 months.
“One of the things that [clients are] particularly interested in is for us to launch an international exchange so that they are able to do some of their trading that they can’t do on our US marketplace,” he said.
In the US, EDX currently offers only three different coins for trading: Bitcoin, Ether and Litecoin. The list is narrow, Nazarali said, due to “a lot of regulatory uncertainty in the US over which cryptocurrencies are securities and which are not.”
