DBS Launches Options Trading and Structured Notes Tied to Bitcoin and Ethereum

DBS Expands Its Digital Asset Offerings with Crypto Options Trading and Structured Notes

DBS is introducing over-the-counter cryptocurrency options trading and structured notes for institutional investors and accredited wealth clients, becoming the first Asian-headquartered bank to offer products linked directly to Bitcoin and Ethereum prices.

Starting from Q4 2024, these products will provide eligible clients with sophisticated tools to manage risk and gain exposure to the digital asset market.

With this move, DBS broadens access to cryptocurrencies, allowing investors to potentially earn yield or take delivery of the underlying asset depending on market performance.

What is DBS

DBS is a leading financial services group in Asia, headquartered in Singapore with operations in 19 markets.

Known for its strong credit ratings and multiple "World’s Best Bank" awards, DBS is recognised for its digital innovation and commitment to customer relationships.

The bank offers a wide range of services in consumer, SME, and corporate banking, and through the DBS Foundation, supports social enterprises and community development.

Building on the Success of DBS Digital Exchange

DBS clients have already been engaging in digital asset trading through the DBS Digital Exchange (DDEx), where cryptocurrencies and security tokens are traded.

The introduction of options trading and structured notes adds a more advanced layer of financial products, allowing investors to diversify their portfolios and manage risk more effectively.

Unlike traditional crypto trading, these new offerings enable clients to hedge against volatility, opening doors to more dynamic investment strategies.

Jacky Tai, Group Head of Trading and Structuring at DBS, highlighted the growing role of digital assets:

“Professional investors are increasingly allocating to digital assets in their portfolios. Underpinned by DBS’ strong credit ratings and longstanding expertise in structuring solutions, these financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem.”

Hedging Against Volatility with Advanced Strategies

A key advantage of these products is the ability for clients to hedge their exposure to the high volatility of cryptocurrencies like Bitcoin.

By utilising put options, clients can protect their investments by locking in a sale price at a future date, even if the market value drops.

This gives investors a critical tool for managing the risks associated with digital assets, while still maintaining potential for returns.

DBS’s offerings ensure that clients can navigate the inherent risks in cryptocurrency trading with a greater sense of security.

Capitalising on Rapid Growth in the Cryptocurrency Market

This launch comes amid a sharp rise in the value of digital assets, with cryptocurrency market capitalisation increasing by 50% in the first five months of 2024.

During this same period, DBS Digital Exchange saw nearly threefold growth in asset value traded, and a 36% increase in active trading clients.

Digital assets custodised by DBS surged by 80%, highlighting the increasing demand for secure platforms in the digital asset space.

DBS continues to meet this demand by offering bank-grade custody solutions, safeguarding clients’ assets through institutional-grade cold wallets.

Exclusive Access for High-Net-Worth and Institutional Clients

These products are reserved for DBS’s institutional and accredited clients from DBS Private Bank and DBS Treasures Private Client.

Offering these advanced tools to sophisticated investors allows DBS to cater to clients with the financial knowledge and risk tolerance required for such products.

Jacky Tai emphasised the significance of the launch:

“Our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.”

Managing Risks in a Volatile Market

While DBS’s offerings provide innovative tools for navigating the digital asset landscape, the bank also urges clients to carefully assess the risks.

Cryptocurrencies are known for their price swings, and DBS reminds investors to weigh their objectives, risk appetite, and financial situation before making any decisions.

These new products offer a more secure and advanced approach to digital asset investment, allowing clients to take advantage of a rapidly evolving market while managing potential risks.