Genesis Global Capital, a service focused on institutional investors, and derivatives market maker Akuna Capital, have completed the first OTC transaction involving a large package of Bitcoin BTIC futures traded on CME.
BTIC (Base Trade at Index Close) means an agreement between the buyer and seller of futures contracts on a basis or spread that is added to the current day's index price to determine the futures price. The instrument is used for derivatives on stock indexes.
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The basis is negotiated prior to the transaction and depends on the total funding rate, dividends [in the case of stocks] and the time remaining to maturity of the contract. The value can be negative or positive. Tim McCourt, head of equity index and alternative investment products at CME Group, commented:
"This is the first time we’re offering BTIC for our cryptocurrency futures and we’re pleased Genesis is able to support and provide liquidity for BTIC on day one. This is another example of how we’re providing innovative solutions to clients who want to gain exposure to CME Bitcoin and Ether futures."
Genesis has explained that the BTIC meets the hedging needs of counterparties that are guided by the Bitcoin Reference Rate as a benchmark.