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| May 08, 2025 | |||||||||||||||||||||||||||||
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| Observations & Insight | |||||||||||||||||||||||||||||
| Coinbase, the largest U.S. cryptocurrency exchange, has agreed to acquire Deribit, the world's leading bitcoin and ether options platform, for approximately $2.9 billion in a deal comprising $700 million in cash and 11 million shares of Coinbase Class A stock, The Wall Street Journal reported. This acquisition marks Coinbase's biggest deal to date and a significant push into the lucrative crypto derivatives market, expanding its global reach and product offering at a time when the regulatory environment has grown more favorable for crypto. Deribit, headquartered in Dubai, saw its trading volumes nearly double to $1.2 trillion in 2024 as institutional interest surged, and its integration will make Coinbase the most comprehensive player in crypto derivatives, complementing its spot and futures trading businesses. The transaction, expected to close by year-end pending regulatory approval, reflects a broader wave of crypto industry consolidation as firms like Kraken and Ripple pursue major acquisitions to capitalize on renewed market momentum. ~JJL | |||||||||||||||||||||||||||||
| Lead Stories | |||||||||||||||||||||||||||||
| Coinbase Buys Derivatives Venue Deribit for $2.9 Billion Muyao Shen and Michael P. Regan - Bloomberg Coinbase Global Inc. agreed to acquire Deribit, the world's largest exchange for Bitcoin and Ether options, for $2.9 billion as the biggest US crypto exchange makes a push into the derivatives market. Coinbase shares were up as much as 6% at $208.34 after the announcement on Thursday, as crypto stocks were also boosted by Bitcoin's advance past $100,000 for the first time since February. /jlne.ws/4m7qWfn Exchange, Brokerage Competition Benefits Retail Options Traders Editorial Staff - Traders Magazine A booming options market has exchanges and brokerage firms vigorously competing to capture and defend turf in fast-growing areas such as short-dated contracts and extended hours trading. The primary beneficiary of the "hand-to-hand combat" is the retail options trader. "Individual investors wins when everyone is competing at a high level," said Chris Larkin, Managing Director, Head of Trading & Investing at E*TRADE from Morgan Stanley. In the options market evolution of recent years, "there's always been something that's helped retail have a much better experience," said JJ Kinahan, CEO at IG North America. /jlne.ws/4m6Jw7p The Rise of Oil Options: Why More Traders Are Getting Involved Amanda Townsley - CME Group Once the exclusive domain of hedging specialists and quantitative experts, oil options are now attracting a broader range of participants, from energy giants to multi-strategy commodity funds and retail traders. What is the impetus behind this shift? The utilization of oil options for risk mitigation within energy markets is not novel, but the recent upsurge in trading activity underscores a substantial change in how traders are addressing risk and potential gains. The first quarter of 2025 saw a 33% increase in CME Group WTI Crude Oil options trading volume over the previous year, while oil futures trading also grew 17%. Enhanced analytics, trading platforms and educational resources have rendered oil options more accessible and attractive to a wider spectrum of market participants. /jlne.ws/42Quw68 Markets are resilient - but this bank says it could fall apart quickly. 'Fundamentals remain dire.'; If the market recalibrates toward fewer rate cuts, it would threaten stocks, says HSBC Barbara Kollmeyer - MarketWatch At the near midway mark of a year marked by tariff turmoil, the battle between the bears and the bulls is still shaping up. "The AI mega force keeps us overweight U.S. stocks and positive on developed market stocks, even with more volatility," a team at BlackRock Investment Institute led by head Jean Boivin told clients. They see a "supply-driven contraction in U.S. activity this year," if tariffs remain the same, but a persistent "AI mega force" keeping developed, especially U.S. stocks, in a better spot. /jlne.ws/4jMiVv3 Wall Street's A-List Worries About the Economy in Private, While Showing Public Calm John Gittelsohn, Aaron Weinman, Alexandre Rajbhandari, and Eliza Ronalds-Hannon - Bloomberg Attendees of this week's Milken Institute Global Conference heard a lot of upbeat chatter from the stages of the Beverly Hilton hotel, where billionaires and executives frequently took a sanguine tone about the state of markets and the global economy. Treasury Secretary Scott Bessent touted the US as the premier destination for global capital. KKR & Co. co-founder George Roberts told the audience to "stay calm and carry on." Ares Management Corp. Chief Executive Officer Mike Arougheti spoke of the "golden opportunity" of private credit. /jlne.ws/42WWWtS | |||||||||||||||||||||||||||||
| Exchanges | |||||||||||||||||||||||||||||
| April 2025 figures at Eurex Deutsche Borse Eurex, Europe's leading derivatives exchange and - along with Eurex Clearing - one of the leading central counterparties globally, went up 16 percent in total trading volume for April, reaching 211.4 million contracts, up from 181.6 million in the same month last year. Equity derivatives increased by 5 percent from 31.8 million to 33.4 million contracts. Interest rate derivatives also saw a notable rise of 20 percent, reaching 94.5 million contracts. In OTC Clearing, notional outstanding volumes experienced a 22 percent rise in April, reaching EUR 41,918 billion, up from EUR 34,264 billion in the same period last year. Notional outstanding for overnight index swaps surged by 43 percent to EUR 5,075 billion, while interest rate swaps increased by 20 percent to EUR 17,658 billion. /jlne.ws/4me53eH Nodal Exchange achieves new records in all markets in April EEX Group Nodal Exchange announced today new records in power, natural gas, and environmental futures trading. In power, Nodal set a calendar month record for April (2nd best month ever) with traded power futures volume of 358 million MWh, up 4% from 345 million MWh in April 2024. Nodal continues to be the market leader in North American power futures with 57% share of open interest at the end of April with 1.489 billion MWh open interest representing $145 billion of notional value based on both sides. Nodal's natural gas markets achieved a calendar month record 112 million MMBtu of traded volume in April 2025, up 54% from April 2024. /jlne.ws/3GJAL2W | |||||||||||||||||||||||||||||
| Regulation & Enforcement | |||||||||||||||||||||||||||||
| Wall Street Brokers Could Lose Billions in Fees on SEC Shift Emily Graffeo - Bloomberg A potential regulatory shift in favor of the ETF industry is expected to shake up the business models of Wall Street brokers, with billions of dollars in revenue at stake. Wirehouses and broker dealers risk losing between $15 billion and $30 billion a year in fees that they currently collect from the mutual funds they offer to customers, according to a report released Thursday by Cerulli Associates. /jlne.ws/3EJhE8P Bitwise Seeks SEC Approval to Launch Spot NEAR ETF Mallika Mitra - etf.com Digital asset manager Bitwise is looking to list an exchange-traded fund that tracks NEAR, the native token of the NEAR protocol, according to a Tuesday filing with the Securities and Exchange Commission. If approved, the Bitwise NEAR ETF will track the price of NEAR minus the expenses of the fund's operations, with Coinbase acting as the custodian. The management fees and ticker weren't included in the filing. /jlne.ws/436mGnI ISDA to Extend DRR to cover MIFID/MIFIR Reporting ISDA ISDA has announced it will extend the ISDA Digital Regulatory Reporting (ISDA DRR) solution to cover reporting requirements under the EU and UK Markets in Financial Instruments Directive (MIFID) and Markets in Financial Instruments Regulation (MIFIR). ISDA is working with The Depository Trust & Clearing Corporation (DTCC) to integrate the ISDA DRR into DTCC's Global Trade Repository (GTR) MIFID/MIFIR Approved Reporting Mechanism (ARM). /jlne.ws/3EWXo3C European Council excludes SFTs from T+1 requirement; The exemption, approved by the Committee of Permanent Representatives, comes as part of the Council's broader agreement on a negotiating mandate aimed at accelerating settlement timelines across the EU. Sophia Thomson - The Trade The European Council has excluded securities financing transactions (SFTs) from the upcoming T+1 settlement requirement, marking a key change to the European Commission's original proposal to shorten the standard securities settlement cycle. Under the proposal, the standard settlement cycle for transactions in transferable securities - such as shares and bonds traded on EU venues - would be shortened from T+2 to T+1. /jlne.ws/3EZ6NaI An Inside Look at Trump's SEC With Commissioner Hester Peirce; During her tenure at the regulator, Peirce's positions moved from fringe to mainstream. In this episode of Trillions, she describes her journey. Joel Weber and Eric Balchunas - Bloomberg Listen and subscribe to Trillions on Apple, Spotify, iHeart and the Bloomberg Terminal. During her time as a commissioner at the US Securities and Exchange Commission, Hester Peirce has often been a dissenting voice-especially on all things crypto. Now, as she approaches the official end of her term, her legacy may include an SEC that's more aligned with the positions she championed. /jlne.ws/3EKJTE5 | |||||||||||||||||||||||||||||
| Education | |||||||||||||||||||||||||||||
| Options Education in Focus Editorial Staff - Traders Magazine Education was a big theme of this year's Options Industry Conference in Palm Beach Gardens, Florida, as it has been for a number of recent OICs. The upshot is that providing more and better education results in better experiences for retail traders, which leads to more options order flow for brokers and exchanges. The Wednesday afternoon panel Shaping the Future of Options Education: Empowering the Next Generation explored how education has helped boost the options industry over the past five years, and its potential for driving future growth. /jlne.ws/44Zo9ic | |||||||||||||||||||||||||||||
| Miscellaneous | |||||||||||||||||||||||||||||
| Banker Bonuses Set to Drop as Tariffs Cause Economic Uncertainty Katherine Doherty - Bloomberg The outlook for some Wall Street bonuses looks grim, with an expected pullback in payouts after a strong 2024 amid economic turmoil caused by the US trade war and geopolitical tensions. Investment bankers, hedge fund employees and asset- and wealth-management professionals are all poised to see lower year-end incentive pay in 2025, according to a report Thursday from compensation consultant Johnson Associates Inc. It's a sharp reversal from last year, when payouts swelled and industry profits soared. /jlne.ws/3Z90QPf | |||||||||||||||||||||||||||||
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