DBS Bank to Launch Bitcoin and Ethereum Options for Institutional Clients by Q4 2024

• DBS Bank becomes Asia’s first bank to offer crypto options and structured notes, linked to Bitcoin and Ethereum.
• New offerings allow eligible DBS clients to hedge against market volatility and manage risks with advanced investment strategies.
• DDEx reports 80% growth in digital assets custodised with DBS, driving demand for secure institutional-grade crypto investment products.

Singapore’s DBS Bank has revealed its plans to introduce cryptocurrency options trading and structured notes by the fourth quarter of 2024. The new offering will be available to eligible institutional clients and accredited wealth clients, marking DBS as the first Asian-headquartered bank to offer such financial products. These new products will be tied to the prices of Bitcoin and Ethereum, two of the largest cryptocurrencies by market value.

Notably, the bank is expanding its range of digital asset services, allowing clients to hedge against market volatility and adopt advanced investment strategies. This development builds on the bank’s current digital offerings through its DBS Digital Exchange (DDEx), where clients already trade cryptocurrencies and security tokens.

New Opportunities for Institutional Investors

DBS Bank’s latest venture is poised to offer institutional clients greater flexibility in managing their cryptocurrency portfolios. The introduction of over-the-counter cryptocurrency options and structured notes will provide opportunities to earn yield or take delivery of underlying assets like Bitcoin and Ethereum. Additionally, these clients can use advanced strategies to manage risks, particularly in volatile markets.

For instance, investors can hedge their positions by purchasing put options, which enable them to sell Bitcoin at a predetermined price, even if its value decreases. As Jacky Tai, DBS Group Head of Trading and Structuring, Global Financial Markets, explains,

Our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.

Crypto Market Growth Drives Demand

DBS’s decision to offer these products comes amid growth in the crypto market. Between January and May 2024, cryptocurrency market capitalization increased by approximately 50%. During the same period, DDEx reported a threefold surge in digital assets traded in Singapore dollar terms. The bank also witnessed an 80% growth in digital assets under custody and a 36% rise in active trading clients.

This increasing demand highlights the appetite for institutional-grade platforms that provide secure, regulated access to digital assets. DBS continues to meet this demand by custodising clients’ digital assets within the bank, using institutional-grade cold wallets, ensuring that the digital assets remain separate from those traded on DDEx.

DBS Expands Digital Asset Portfolio

With the forthcoming options trading and structured notes, DBS Bank is further strengthening its foothold in the digital asset space. The bank’s offerings will be available to institutional and accredited clients of DBS Private Bank and DBS Treasures Private Client. However, the focus remains on providing secure, trusted access to cryptocurrency products in the growing market.

DBS’s continued growth in the digital assets sector reflects the broader trend of professional investors increasingly allocating to digital assets in their portfolios. As Jacky Tai notes, “These financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem.”