GSR and Wealth Manager St. Gotthard Execute Options Trade Tied to CoinDesk 20 Index

  • GSR announced Wednesday the completion of a first options transaction tied to the CD20 index.
  • The CD20 index was introduced earlier this year and is a broad-based market index for crypto, similar to the Dow Jones average for U.S. equities.

Crypto trading firm GSR said today it completed an options transaction based on the CoinDesk 20 (CD20) Index with Zug-based asset manager St. Gotthard Wealth as the counterparty.

"Options are a powerful tool for managing risk and volatility, Rich Rosenblum, co-founder and co-CEO of GSR, said in a statement shared with CoinDesk. "We are enthusiastic about continuing to play a central role in the expansion of this market.”

The CoinDesk 20 was launched in January. It is a cryptocurrency market benchmark that measures the performance of the largest digital assets, similar to the S&P 500 Index or Dow Jones Industrial Average for U.S. equities. The largest constituents of the CD20 are bitcoin, at 30%, ether at 19%, SOL at 19% and XRP at 7%.

"While the BTC and ETH options markets are now sufficiently evolved, investors have so far lacked a way to take a view on or hedge risk against the broader crypto market performance," Ruchir Gupta, head of options and treasury at GSR, said in an email to CoinDesk.

"Derivatives on crypto indices like CD20 give investors the opportunity to manage their exposure to the broader market in an efficient format," Gupta said.

Having a vibrant futures market is often seen as a prerequisite for options. Bullish, the cryptocurrency exchange that owns CoinDesk, offers perpetual futures contracts tied to the CoinDesk 20, allowing traders to take bets on the broader market. So far, the CD20 index has generated approximately $6 billion in perpetual futures volume over the past six months.

The CD20 traded above 2,000 throughout the Asia Wednesday business day, up 2% in the last 24 hours.