In a world of increasing economic uncertainty, investors large and small are turning to safe haven investments to protect their portfolios. With traditional methods increasingly complicated by the crisis, institutional liquidity provider OrBit Markets is offering a revolutionary new solution. Their XAUT hybrid derivative product provides a stable and secure option to combine exposure to both bitcoin and gold.
Protecting Investments with Hybrid XAUT Token
The recently announced initiative is designed to give both experienced and inexperienced investors alike the chance to hedge their existing investments and protect against the ever-changing marketplace. The XAUT product is a gold-backed token issued by Tether. At maturity, it will be settled in either USDT, XAUT or bitcoin, as designated by OrBit Markets, the Singapore-based company responsible for the product.
With traditional finance companies providing hybrid products that involve both stocks and commodities, OrBit Markets is looking to provide a similar offer within the Bitcoin space. The company said that investor sentiment for these ‘safe havens’ has increased amid speculation over the US Federal Reserve’s monetary policy and the subsequent impact on the banking sector.
Risk Management Strategy: Hedging Bitcoin and Gold Returns
The hybrid product — enabling investors to switch between bitcoin or gold — allows for the hedging of various sophisticated views. Depending on the investor, the product could provide for increased or decreased returns for both assets or for one to increase while the other decreases.
The “worst-of-put option”, a feature of the product, will ensure investors are “put” into the worst performer should either asset see a fall. Elsewhere, should an investor request it, they can receive an enhanced yield. To put it simply, the product provides a risk management strategy, enabling savvy investors to safeguard themselves against the risks of crypto-investment in turbulent times.
MEV Capital Hedges Uniswap (v3) Losses with OrBit Options Contracts
In March of 2021, MEV Capital used OrBit markets-issued options contracts to hedge liquidity provider positions. This was done to prevent losses in Uniswap (v3) liquidity pools. VP of Trading at OrBit Markets Pulkit Goyal notes that OrBit aims to provide flexible solutions. They will launch further hybrid products in the coming months.
The renewed bias for put options indicates an expectation for a deeper slide in the Bitcoin price. Evidenced by the 30-day bitcoin skew reflecting demand for cheap OTM call and put options. This comes as the US dollar market depth has decreased significantly. The Silvergate crisis and operational bottlenecks at major exchanges fueled it.
Meanwhile, the coinage of tokenized gold assets has surged past the $1 billion mark. This provides investors with a way to gain exposure to the precious metal without the fees and rigmarole of ETFs or the safety concerns of storing bullions. Pax Gold (PAXG) and Tether Gold (XAUT) are currently leading the way as investors turn to these ‘digital gold’ options as an alternative.
Bitcoin Prices Soar Amid Gold Rally, Put Options Demand
Growth is not limited to gold-backed stablecoins. However, Bitcoin prices have been on the up too, thanks to a concurrent rally in the gold market. Concerns regarding the possible government bailout and consequent devaluation of currencies have also contributed.
At the time of writing, the 30-day bitcoin skew had dropped to -3.62 – the lowest since January 7th. The 60 and 90-day metrics have similarly sunk to two-month-lows. Ethereum-based options were equally in demand, with Paradigm noting investors’ favor for put options. Paradigm is an institutional liquidity network for crypto derivatives traders.
Navigating Uncertain Markets: XAUT Option for Bitcoin & Gold Security
As investors search for ways to navigate uncertain markets, OrBits Markets offers XAUT – a revolutionary option. XAUT combines exposure to both bitcoin and gold – two of the most reliable assets during times of turbulence. OrBit Markets are providing investors with protections, despite the uncertain success of the product. This is a clear indication that crypto-investment is here to stay.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
