Crypto OTC Trading Platform B2C2 Launches New Bitcoin-Settled Gold Derivative

Cryptocurrency over-the-counter (OTC) trading platform B2C2 created the first gold derivative product, priced and settled in Bitcoin.  

B2C2 stated that the gold-bitcoin derivative would allow institutional clients to trade gold via its OTC trading operations regulated and licensed by the United Kingdom’s Financial Conduct Authority (FCA).   

Max Boonen, founder and CEO of B2C2 explained that the move for the launch of the product was due to the increasing demand from large-volume traders:  

“Clients trade an ounce of gold (minimum trade size) priced in bitcoin, and the derivative is settled in bitcoin. The clients we are seeing demand from are those who have their own user base of traders and macro hedge funds.”  

Boonen clarified on the benefits of the product, “the benefits of trading gold (or bitcoin) in a derivative form (synthetically) is that it’s simpler to trade than the cash underlier for a variety of operational reasons, and typically represents the majority of activity in the product/asset.  

With the fear of the impact of the US-China trade war and other macroeconomic factors, the price of gold has climbed to a great degree. Boonen further explained:  

“The current macro environment, dominated by uncertainty over economic growth and inflation, is prompting central banks to rethink monetary policy and market participants to reassess the likely path of interest rates. Conflicting narratives abound, fueling market activity, and we expect demand to only grow for ways to gain and manage exposure to deflationary assets such as gold and bitcoin.”  

Pax Gold, which was launched recently as a gold-pegged token issued by stablecoin firm Paxos, also allows clients to settle trades in tokens. Boonen told The Block, “we are agnostic as to which of the major tokens our clients choose to use to settle their trades with us, be it Paxos Gold or another. These tokens will give them access to the underlying metal since they correspond to ownership of physical gold in vaults.”