Crypto Options Liquidity Provider OrBit Markets Offers Bitcoin and Gold-Hybrid Derivative

The company said the product’s payoff will depend on the joint performance of both BTC and the gold-backed token XAUT.

AccessTimeIconMay 9, 2023 at 12:55 a.m. UTC
Updated May 9, 2023 at 8:24 a.m. UTC

Orbit Markets, an institutional liquidity provider of crypto options, is rolling out the first bitcoin and gold hybrid-focused derivative product with execution broker PI Digital.

The initiative is among the latest developments among crypto industry firms to provide steady returns during periods of macroeconomic uncertainty. It aims to give investors exposure to gold and digital assets, two assets that hold their value.

“This hybrid asset product is a perfect fit for investors that have experience in traditional assets such as gold and are now starting to dip their toes into digital assets,” OrBit Markets said in a press release.

The derivative product, XAUT, is a gold-backed token issued by Tether. At maturity, the product will be settled in either USDT, XAUT or bitcoin as designated by OrBit, the Singapore-based company said.

In its statement, OrBit noted that traditional financial service firms (TradFi) commonly offer hybrid products, including those combining stocks and commodity assets.

The company said that investors “anticipating a sustained rally” in these two “safe haven” assets have risen amid growing concerns about the U.S. central bank’s hawkish monetary policy and resulting turmoil in the banking sector.

“It's a dual option on both BTC and XAUT,” OrBit said, adding that investors could express “various sophisticated views” on bitcoin and the XAU token, including increases or decreases in returns for both, or if returns for one of the assets climbs but fall for the other.

The "worst-of put option" allows investors to earn an enhanced yield if both assets appreciate. On the flip side, investors may be "put" into the worst performer should either asset fall, the liquidity provider said.

In March, DeFi-focused asset management company MEV Capital used OrBit markets-issued options contracts to hedge liquidity providers’ positions and prevent losses in Uniswap (v3) liquidity pools.

“OrBit aims to offer flexible solutions to our counterparties,” Pulkit Goyal, OrBit Markets VP of Trading adding that “OrBit plans to launch further hybrid products dedicated to institutional investors.”

Edited by James Rubin.


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Jocelyn Yang

Jocelyn Yang is a markets reporter at CoinDesk. She is a recent graduate of Emerson College's journalism program.

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