According to a report in Singapore's Straits Times, DBS Bank announced today that it will be launching financial products linked to the price of Bitcoin (BTC) and Ethereum (ETH). Starting in the fourth quarter of 2024, institutional clients will be able to invest in these crypto assets through options trading and structured notes. DBS Bank claims to be the first bank in Asia to introduce such financial products.

Crypto options contracts derive their value from the price of the underlying cryptocurrency. Investors can use these contracts to "hedge" against fluctuations in asset prices. Structured notes are investment instruments issued in the form of notes, combining "fixed-income products" and "derivative financial products" to create a new type of financial product.

DBS Bank stated that clients holding Bitcoin and Ethereum in custody with DBS Bank can hedge their positions through various options structures to mitigate market volatility. Clients looking to manage cryptocurrency price fluctuations can purchase put options, allowing them to sell Bitcoin at a fixed price even if the price drops below that fixed price at a future date.

Jacky Tai, Head of Trading and Structuring at DBS Bank Group, pointed out that professional investors are progressively increasing their digital asset allocation in their portfolios. This move provides another avenue for professional investors to access the digital asset market, allowing them to employ more sophisticated investment strategies for managing their digital asset portfolios.

Jacky Tai added:

"This aligns with DBS Bank's value proposition of providing access to a trusted institutional-grade digital asset ecosystem for qualified clients."