Cryptocurrencies

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.