Over the past few months, Bitcoin and Gold have both witnessed noteworthy surges as investors have bet on the Federal Reserve slowing down the pace of interest rate hikes. The recent instability in the banking system has also further driven up the prices of these assets, leading some market observers to conclude that Bitcoin may in fact live up to its “digital gold” promise and compete with gold for the safe haven asset status. Investors anticipating a sustained rally in both these assets are now able to generate enhanced returns by combining both exposures in a single product.
Orbit Markets, one of the leading institutional liquidity provider in digital asset options, executed the trade with PI Digital, a regulated best-execution broker for high net worth individuals and institutional clients based in Switzerland. Antonio Pellizato, founding partner at PI Digital, commented “We strive to offer high-end bespoke services to our clients, always balancing performance and risk management in the most efficient ways. This hybrid asset product is a perfect fit for investors that have experience in traditional assets such as gold and are now starting to dip their toes into digital assets”.
The derivative product references XAUT, the gold-backed token issued by Tether and allows investors to earn up to 40% APR. At maturity, the product will be settled in either USDT, XAUT or BTC as designated by OrBit. Hybrid products are common in traditional finance, for example those that combine equity and commodities assets. “OrBit aims to offer flexible solutions to our counterparties. This trade showcases our ability to remain at the forefront of innovation in digital asset risk management” said Pulkit Goyal, VP of Trading at OrBit Markets. OrBit plans to launch further hybrid products dedicated to institutional investors.
