B2C2, a cryptocurrency “liquidity provider” and electronic OTC trading magnate, has recently announced that British regulators have given their U.K.-based subsidiary approval to offer the crypto space a new investment derivative.
According to a press release shared with Bitcoin Magazine, the British Financial Conduct Authority (FCA) has authorized B2C2 OTC Inc. “to arrange and deal in Contracts for Difference (CFDs) with eligible counterparties and professional clients.” The release went on to claim that “the FCA authorisation will allow these clients of B2C2 OTC Ltd to gain exposure to cryptocurrency markets via the firm’s CFDs.”
Founder and CEO Max Boonen elaborated that they will be using this license “to introduce a cryptocurrency CFD product,” claiming that “eligible counterparties and professional clients can now gain derivative exposure to the cryptocurrency markets, benefiting from the competitive pricing and liquidity they’re accustomed to receiving from B2C2 while avoiding the risks associated with crypto custody.”
A CFD is an investment vehicle that allows investors to make contracts directly with brokers/banks, instead of relying on an open position in a market. The investor does not actually own the assets in question, but instead makes a bet on how the value of the assets will change (like with futures), thus the name “contracts for difference.” Of particular note to the crypto space is that the investor can easily bet that the value of assets will depreciate or increase, making it a convenient avenue for shorting or longing, respectively.
B2C2 calls itself “a market leader in CFDs,” earning the trust of “retail brokerages, exchanges, banks and fund managers to provide 24/7/365 liquidity,” and offering “exposure to large-cap cryptocurrencies, with flexible trade sizes and settlement.” With the ability to offer Bitcoin CFDs in the British financial system, the derivative is the newest legacy financial avenue through which bitcoin could see more institutional investor exposure.
The product’s unveiling comes on the heels of news that the Cboe, after retracting a rule-change filing last week, has resubmitted an application to the U.S. Securities and Exchange Commission to list the world’s first bitcoin exchange traded fund, a financial product that many view as Wall Street’s doorway into the crypto market.