Australian-based zerocap-based digital asset firm is in a major position to observe the development of the structured product space, which has operated the OTC, market manufacture, derivatives and crypto conservation businesses since its founding in 2018.
Here the zerocap sales leader Mark Hiriart discussed how these products change, a new semi-Principal product his firm is launching, how demand for structured products varies through the geographic region, and the most unusual structured product request he has seen.
Tell us about zerocap.
Zerocap is Australia’s leading institutional digital assets firm, established in 2018. We run many business lines including an OTC desk, market -making and derivatives business, all supported by our care offer. We run as a representative of the authorized corporation of a owner of Australian Financial Services (AFSL), allowing us to exchange financial products such as derivatives with wholesale accredited investors. We also established a number of high-profile partnerships in institutions such as the Anz Bank for their Stablecoin, and the Reserve Bank of Australia (RBA) for various proof of concepts and pilots. As we became the leading liquidity player in Australia for the past 18 months, our reach has reached clients in more than 50 countries.
A new product has recently been announced – tell us about it.
We partnered with CoinDesk indices to launch a semi-principal-protected structure to CoinDesk 20 Index (CD20). The product offers reversed CD20 exposure with basic protection that limits the downside risk to 5%, while offering up to 40% potential return to the reversal. This is the first of a series of structured products that we will create with CoinDesk indices, featuring a variety of compensation for different risk appetite.
The timing is particularly related to the current market feelings. Using the rally on digital assets around Trump and potential global trade headwinds to navigate, we look forward to some sideways action in the near term. This medium-risk exposure product applies to the current macro environment.
What market space does your new product fill, and who is it designed?
In the digital asset space, we have no established benchmarks as there are traditional markets. For example, if an Australian investor or someone in Hong Kong wants us to expose tech, they usually look for products that are linked to NASDAQ or QQQ ETF. In Crypto, we have no level of index. This product is designed for three groups: family offices and individuals with high nets seeking to enter the space; Investors who want extensive crypto exposure without deep dive into individual properties; And those who understand Bitcoin but want a variety of exposure with managed risk.
Why did you choose to base it on the CoinDesk 20 index?
We chose the CoinDesk 20 index for four main reasons. One, we greatly respect the CoinDesk brand and the quality of their index team. Two, our strong bullish relationship provides access to futures contracts for healing. Three, there is a clear market demand for index products in the crypto space. And eventually, my background in equity derivatives in investment banks shows me how people use these products, and it’s a natural evolution for crypto.
How are structured products emerging?
Two major factors have a history of limited product -structured adoption: one, high crypto volatility means simple positions in the area can provide significant return, and two, the proliferation of eternal futures with high action that has reduced demand for options markets. That balance is shift, however, as more participants hold structural positions. Venture funds, portfolio managers with policies based on allocation and large mandate holders require specific hedging solutions that Perpetuals cannot provide for the dependence on the path.
What is the effect of having crypto ETFs on structured products?
ETFs serve as a “gateway drug” to structured products rather than censorship them. The introduction of products such as the Blackrock ETF has brought new participants into the crypto space. While these investors have become comfortable with crypto exposure through ETFs, they naturally advance to exploring more sophisticated products for improved return or risk management.
What patterns of institutional demand do you see for structured products in Asia compared to other regions?
Asia usually shows a strong appetite for auto-call structures, where investors sell downside or puts to receive large coupons based on target prices upside down. This is different from the more conservative approach to the US and European markets. Having worked with JP Morgan and Morgan Stanley in equity derivatives trading, I saw the differences in the region.
Australia sits somewhere in between, and in zerocap, we have successfully converted unoccupied product players to product-structured product users. We are looking to expand this expertise in Asia, subject to regulatory requirements.
Are we at risk of overcrowding of crypto volatility that is out of existence?
As the crypto develops, the various possessions are naturally with different volatility profiles. While Stablecoins maintain stability and the volatility of Bitcoin can be eliminated in institutional adoption, there are still many opportunities for high-volatility exposure to the curve of the market cap, from Solana to Memecoins. The market is aging to cater to the various investor needs. For portfolio allocation, if it is 1%, 2%or 5%, investors require extensive beta exposure through established properties such as Bitcoin and Ether, complemented by smaller allocation in emerging opportunities.
What has been the most commonly structured product request you have ever seen?
We are one of some tables around the world that offers derivatives on ALT coins and so we have asked to priced some wild and wacky things. I can officially confirm that we exchanged a Fartcoin option recently, which is something for someone who has spent his career on Big US banks!
Thinking, where do you see the defi and traditional structured intersecting products?
While defi and structured products show interesting -kindly opportunities, we need to recognize that crypto is complicated, and that structured products add another layer of complexity. However, tokenization makes sense for legal documentation and fungibility, as you can audit a source code to understand exactly what you get. This space will grow along the tokenization of the real-world asset (RWA), but widespread adoption can take time.
When do you think digital assets will be a long -term investment?
Transfer from trading vehicles to long -term investment will take place as protocols and tokens show clear measures on the value and use of cases. Bitcoin has proven to be viewed as digital gold, while it is still debatable in the Callethereum “Ultrasound money”.
For further visit to information https://zerocap.com/.
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