Popular cryptocurrency exchange Bitstamp and California-based Silvergate Bank have partnered up to launch a new Bitcoin leverage trading product. It would allow institutional investors to trade with leverage collateralized by Bitcoin and held on the exchange.
SEN Leverage By Bitstamp And Silvergate Bank
The Luxemburg-based cryptocurrency exchange recently announced its involvement with Silvergate Bank’s new product – SEN Leverage. Investors will have the option to obtain USD loans collateralized by bitcoins held on Bitstamp.
Initially, the new platform will only be open to a specific number of institutional customers of the bank. It will be powered by Silvergate Exchange Network (SEN) and both companies have already started the pilot phase.
According to Miha Grcar, Head of Business Development at Bitstamp, SEN Leverage provides one key feature that will help all customers. She says, “Silvergate’s real-time 24/7/365 ability to both fund loans and to accept repayments over the SEN, thus enabling Silvergate’s customers to more flexibly manage their bitcoin positions.”
Also speaking on the matter was the CEO of Silvergate, Alan Lane:
“Our digital currency customers have asked us to help them create greater capital efficiency, and we are excited to be working closely with Bitstamp to solve this problem for them. The integration and work that our collective teams have put into this over the past six months is a testament to the conviction we have to serve our customers.”
Other Options For Institutional Investors
The interest from institutional investors for Bitcoin and the cryptocurrency market appears to be on the rise in the last several months. Different companies provide an extensive set of investment options, such as physically-delivered and cash-settled Bitcoin Futures, and Bitcoin Futures Options.
Bakkt, ICE’s Bitcoin Futures trading platform, launched a few products last year in this regard. It’s considered as another significant step towards mass adoption mainly because of its regulated warehousing and price discovery.
More recently, the Chicago Mercantile Exchange also added another product to its portfolio. As of January 13th, CME also offers options on Bitcoin Futures and is already gathering large trading volumes.
Even though SEN Leverage is a different sort of product, it still appears as a step in the right direction when it comes down to attracting more institutional investors.