The firm of digital assets based in Australia, Zerocap, is in a privileged position to observe the development of the structured products space, having operated OTC businesses, market manufacture, derivatives and cryptographic custody since it was founded in 2018.
Here, Zerocap’s sales chief Mark Hiriart, discusses how these products are changing, a new protected semi-main product that his company is launching, how the demand for structured products varies according to the geographical region and the most unusual structured product application you have seen.
Tell us about Zerocap.
Zerocap is the main institutional digital asset firm in Australia, established in 2018. We operate multiple commercial lines that include an OTC desktop, market manufacturing and a derivative business, all backed by our custody offer. We operate as an authorized corporate representative of a head of the Australian Financial Services License (AFSL), which authorizes us to exchange financial products such as derivatives with wholesale accredited investors. We have also established a series of high -profile associations with institutions such as Anz Bank for its Stablecoin and the Australian Reserve Bank (RBA) for various concepts of concepts and pilots. While we have become the main liquidity player in Australia in the last 18 months, our reach extends to customers in more than 50 countries.
Recently announced a new product, tell us about it.
We have partnered with Coendesk indexes to launch a semi-primary protected structure in the COINDESK 20 index (CD20). The product offers upward exposure to CD20 with the main protection that limits the risk of decline to 5%, while offering a return potential of up to 40% in the rise. This is the first of a series of structured products that we will create with Coendesk indexes, with different payments for several risk appetites.
The moment is particularly relevant given the current feeling of the market. With the manifestation in digital assets around Trump and potential winds against winds against navigating, we anticipate a lateral action in the short term. This average risk exposure product is suitable for the current macro environment.
What gap in the market fills its new product and who is designed for?
In the digital asset space, we have no reference points established as in traditional markets. For example, if an Australian investor or someone in Hong Kong wants exposure to US technology. They usually look for products linked to Nasdaq or QQQ ETF. In Crypto, we have not yet had that level of indexization. This product is designed for three groups: family and high -patrimony offices seeking to enter space; Investors who want exposure to wide base cryptography without diving in individual assets; And those who understand Bitcoin but want diversified exposure with administered risk.
Why did you choose to base it on the Coindesk 20 index?
We select the Coindesk 20 index for four key reasons. One, we deeply respect the Coendesk brand and the quality of its index team. Two, our strong relationship with Alcista provides access to futures for coverage. Three, there is a clear need for the indices market in the cryptographic space. And finally, my capital derived experience in investment banks shows me how people use these products, and it is a natural evolution for cryptography.
How do structured products evolve?
Two main factors have the adoption of historically limited products: one, a high volatility of the cryptogram meant that simple simple positions could provide significant yields and two, the prevalence of perpetual future with high reduced leverage of the demand for options markets. However, that balance is changing, since more participants have structural positions. Risk funds, portfolio managers with allocation policies based on value and large mandates owners need specific coverage solutions that perpetuals cannot provide due to the dependence on the route.
What impact does the advent of cryptographic ETFs on structured products have?
ETFs serve as a “medication for the entrance door” to structured products instead of cannibalizing them. The introduction of products such as Blackrock ETF has brought new participants to cryptographic space. As these investors feel comfortable with exposure to cryptographic through ETFs, they naturally progress to explore more sophisticated products to obtain improved yields or risk management.
What institutional demand patterns are you seeing for cryptographic structured products in Asia versus other regions?
Asia usually shows a strong appetite for automatic call structures, where investors sell down or start receiving large coupons based on upward price objectives. This differs from the most conservative approach to US and European markets. After having worked at JP Morgan and Morgan Stanley in the capital derivatives, I have seen these regional first -hand differences.
Australia is at some intermediate point and Zerocap, we have successfully converted reproducers of unstructured products into users of cryptographic structured products. We are looking to expand this experience to Asia, subject to regulatory requirements.
Are we at risk that excessive cryptography volatility outside existence?
As cryptogram develops, different assets naturally have different volatility profiles. While the stable maintains the stability and volatility of Bitcoin can decrease with institutional adoption, there are still many opportunities for high volatility exposure in the market capitalization curve, from Solana to Memecoins. The market is maturing to meet the different needs of investors. For portfolio allocation, either 1%, 2%or 5%, investors need extensive beta exposure through assets established such as Bitcoin and Ether, complemented with smaller assignments to emerging opportunities.
What has been the most unusual structured product application you have seen?
We are one of the few desks worldwide that offers derivatives in alternative currencies and, therefore, ask us to put a price of wild and crazy things. I can officially confirm that we have changed an option in Fartcoin recently, which is something for someone who has passed his career in the great US banks!
With that in mind, where do you see defi and traditional structured products that cross?
While defending and structured products present interesting opportunities, we must recognize that cryptography is already complex, and structured products add another layer of complexity. However, tokenization makes sense for legal documentation and fungibility, since it can audit the source code to understand exactly what it is obtaining. This space will grow with the tokenization of the real world asset (RWA), but generalized adoption can take time.
When do you think digital assets will become long -term investments?
The transition from commercial vehicles to long -term investments will occur as protocols and tokens demonstrate clear value proposals and use cases. Bitcoin has proven to be seen as digital gold, while it is still debatable to call “ultrasound money” calls. Other protocols are still fighting to find their niche and demonstrate a tangible value in the digital economy. As these assets are more integrated into economic systems, their long -term value proposals will become more measurable.
For more information, visit https://zerocap.com/.
The opinions and opinions of the authors are their own and are not associated with Coindesk indices. The interview was conducted by the Coindesk indices and is not associated with the Coindesk publishing house.
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