TP ICAP Ventures into The Crypto Space to Trade Bitcoin (BTC) Derivatives




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TP ICAP, a leading global interdealer brokerage firm, has decided to hop onto the crypto bandwagon. The company’s ICAP unit is now acting as a broker between clients that want to buy or sell BTC futures. TP ICAP decided to dip its toes in crypto after its primary brokerage business plunged and failed to soar again.

According to a report, TP ICAP’s crypto venture will operate from London. Simon Forster and Duncan Trenholme will work together in heading this project. Reportedly, this initiative seeks to introduce non-deliverable forwards connected to BTC. On top of this, it aims to open trading desks in Asia and in the US.

This move sets TP ICAP apart from other top money managers and investment banks, which have avoided associating with crypto coins. Their major concerns are market manipulation, money laundering, and the cyber threats that plague the crypto sector.

TP ICAP’s Joined Crypto After Its Market Value Slumped

TP ICAP previously relied on handling trades for banks. However, the firm’s trade volume decreased following last year’s financial crisis. As a result, the company’s share price lost 36 percent of its value in a day. To date, TP ICAP has only recovered 10 percent of the lost value to reach a market cap of 1.6 billion pounds (approximately $2 billion).

In the report, Trenholme, TP ICAP’s co-head of digital asset markets said,

Every institution is on an educational journey.

He added,

Many are exploring how tokens can legitimately be traded or stored and I’d expect more projects to hit the market over the next year or two.

Taking Cautious Steps

Clients that want to trade bitcoin derivatives through ICAP have to adhere to some requirements. Per Frits Vogels, TP ICAP’s Europe CEO, customers have to pass identity and money laundering tests. This explains why the company decided not to invest directly in the crypto market. Its step in the crypto sector involves trading cash-settled futures on a regulated public market. The market is managed by the CME Group.

TP ICAP chose CME because it is the only regulated platform at the moment. Cboe Global Markets is reportedly settling its last bitcoin futures contract this week after trading for 18 months.

In the publication, Forster noted,

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.

He further cited,

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.

This news comes as traditional firms continue joining the crypto sector. Prior to this, Fidelity Investments launched Fidelity Digital Assets in the past year to let its clients buy and sell BTC. Also, Intercontinental Exchange rolled out Bakkt in 2018 to give retail traders a chance to buy or sell crypto coins.

Do you think TP ICAP’s share price will surge after introducing bitcoin derivative trading? Let us know in the comments below.