This move opens a new door for institutional investors to delve deeper into the increasingly popular altcoin market. Paradigm’s announcement is as follows:

“Clients can now execute block trades for Polygon (MATIC), Solana (SOL), and Ripple (XRP). Linear options offer investors returns that are directly correlated to the price movements of the underlying asset.”

Options are contracts that give buyers the right (but not the obligation) to buy or sell the asset at a predetermined price (strike price) on a specific date (expiration date). There are two main types of options:

• Call option: It gives the right to purchase the asset in question on or before the specified date.
• Put option: It gives the right to sell the asset in question on or before the specified date.

Block trades, on the other hand, are privately negotiated futures, options or combination transactions that exceed a certain volume limit. In these transactions, the price volatility (slippage) generally experienced in traditional stock market trading is minimized. Participants use communication platforms like Paradigm to request bids bilaterally and agree on price. Once an agreement is reached, the transaction is sent to an exchange such as Deribit for execution and clearing.

The advantages of block trades are:

• Lower Slippage: Large amounts of trades can affect the market price. Since block trades are carried out secretly, their impact on the market is minimal.
• Increased Efficiency: Block trades can be completed faster and more efficiently compared to traditional exchange transactions.
• Better Pricing: Thanks to large volumes of transactions, block trades can often result in more attractive prices.

Paradigm’s OTC network has become the platform of choice for block trades among institutional investors since 2016. The company has reached a transaction volume of approximately 400 billion dollars since its establishment. As of May 2024, 17% of Bitcoin and Ether option transactions on Deribit were made through Paradigm.

Paradigm’s new block trading service is already attracting attention. The company announced on Monday the successful completion of its first block trade transaction involving a 500,000 unit MATIC call spread between Singapore-based cryptocurrency investment firm QCP Capital and Galaxy Digital. This transaction included MATIC call options with expiration dates of 80 cents and 95 cents expiring May 31. Paradigm facilitated this trade on Deribit. MATIC is Polygon Network’s native cryptocurrency used for staking transactions and paying gas fees.

Deribit’s CEO, Luuk Strijers, said the following about this development:

“We are excited to expand Paradigm’s block trading services to include linear altcoin options, starting with the pioneering MATIC options trading on our platform. This expansion not only expands our mutual offering, but also sets the stage for the upcoming first blocks in SOL and XRP.”

This move by Paradigm highlights the growing involvement of institutional investors in the cryptocurrency market. The block trading service offered by the company brings an important innovation for investors to diversify their risk management strategies and enter the market with more confidence, especially in the altcoin market, which can be highly volatile. This may contribute to both the maturation of the cryptocurrency ecosystem and the increased interest of traditional financial institutions in this field.