Wall Street Bank Cowen Offers Spot Bitcoin Trading

from wall street to bitcoin

The company took advantage of its small footprint to quickly forge its way into offering spot rather than futures trading of bitcoin and cryptocurrency.

The company took advantage of its small footprint to quickly forge its way into offering spot rather than futures trading of bitcoin and cryptocurrency.

Boutique Investment Bank Cowen Inc. will reportedly offer its institutional clients spot bitcoin trading through a new business unit. “This will be a meaningful division,” the co-president said. Standard Custody & Trust Co. will act as the bank’s cryptocurrency custodian.

Wall Street investment bank Cowen Inc. has introduced a new digital asset unit to offer spot bitcoin and cryptocurrency trading to institutional investors, Bloomberg reported Wednesday.

The company leveraged its small footprint to stay ahead of its larger competitors as the financial hub aims to embrace the spot markets of the burgeoning asset class. Goldman Sachs conducted its first over-the-counter (OTC) bitcoin options trade earlier this week in an effort to align with derivatives-based offerings as uncertainties and complexities surrounding spot products hold back development.

“We have a big first mover advantage in this space,” Cowen co-chair Dan Charney told Bloomberg. “Because of our culture, we’re able to work with our legal, compliance and regulators in ways that our larger competitors may not, and we’re just able to get to solutions faster.”

Cowen’s new business unit will primarily target the bank’s hedge fund, mutual fund and family office clients, according to the report. Assets purchased by these institutions are held by the institutional platform Standard Custody & Trust Co.

It is unclear whether customers will be able to withdraw the bitcoin they have purchased, but as Cowen will act as a custodian, it appears that customers will not have that option. Without proper self-custody, those institutions will be limited to the asset’s potential rise in price and unable to store wealth without third party risk or freely trade value. However, such use cases are arguably more appealing to individuals.

Cowen’s new unit also plans to offer cryptocurrency derivatives and futures trading, lending and institutional access to decentralized financial platforms and non-replaceable tokens, according to the report. The unit has launched with 40 bank employees, but is reportedly planning to more than double the workforce soon.

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