World’s largest broker TP ICAP launches Bitcoin futures trading

The TP ICAP brokerage company plans to add non-deliverable Bitcoin Futures to its product suite and open trading desks in the U.S. and Asia, according to a report by Bloomberg.

TP ICAP’s Bitcoin brokerage

Based in London and overseen by directors Simon Forster and Duncan Trenholme, TP ICAP’s Bitcoin brokerage business will focus on matching buyers and sellers of CME Bitcoin Futures.

TP ICAP is also exploring other digital assets, including tokenized securities, which could be added to the company’s product suite in the future. While the brokerage will focus on regulated, exchange-traded Bitcoin Futures, the London-based company may act as an intermediary for crypto assets in the future.

“Every institution is on an educational journey. Many are exploring how tokens can legitimately be traded or stored and I’d expect more products to hit the market over the next year or two,” Trenholme, co-head of digital asset markets, told Bloomberg.

“We want to be close to what’s happening within this nascent asset class because we believe it’s important to invest in the early stages of a growing market. TP ICAP also understands that this technology could disrupt or impact other asset classes where we currently operate, so we feel it’s important to be informed,” Forster added.

Will more brokers move into Bitcoin trading?

Traditionally, the primary business of interdealer brokers, such as TP ICAP, has been matching trades between banks across all asset classes. However, this business model has been gradually eroded due to post-GFC regulations, and a move towards electronic trading.

As a result, interdealer brokers have been hurting. TP ICAP, for example, lost 36 percent of its market value after a profit warning last year and has only recovered marginally since. The shares of its main competitor, BGC Partners, are trading close to their five-year low with the company also struggling with shrinking revenues.

In the past two years, we have witnessed a boom in the Bitcoin OTC brokerage market, with dozens of brokers now competing to match trades for whales, family offices, hedge funds, and institutional investors.

With TP ICAP now offering Bitcoin services, it is expected more established financial services companies, especially from the brokerage sector, will follow.