Institutional adoption of cryptocurrencies appears to be at an all-time high as Canada’s largest stock market operator, TMX Group, is the latest to join the train. According to reports, TMX Group has revealed plans to launch its first cryptocurrency futures product.
A Major Milestone for Institutional AdoptionTMX Group noted that the impending launch of the cryptocurrency futures product is due to the overwhelming demand from institutional investors looking to offset trading risks in the relatively new asset class. The stock market operator intends to release this new financial product on the Montreal Exchange later in the year and noted that it represents a major milestone for the firm. TMX also revealed that the futures product would be fully compliant with existing regulations around futures products. There is also no plan to extend this feature to retail investors. Speaking on the development CEO, John McKenzie noted that more institutional clients were holding more crypto than before.
“More institutional investors and dealers are… holding more crypto assets within their portfolios or for their clients or in ETFs,” “In crypto, there’s a lot of price volatility so (they’re looking at) how they manage that exposure,” he said.TMX operates the Toronto stock and Montreal derivatives exchanges and is no stranger to crypto-based derivative products. It listed the world’s first bitcoin ETF in 2021 and currently has 17 crypto exchange-traded funds (ETF) listed on the Toronto Stock Exchange. There is a local consensus that TMX is responding to increased interest from investors and clients in its jurisdiction. For example, earlier in the week, accounting giant KPMG in Canada revealed the addition of Bitcoin and Ethereum to its balance stating that investors were interested in the maturing asset class. Therefore, it is unsurprising that TMX is looking to expand its existing crypto-derivatives offerings to more markets.