GSR, the global leader in digital asset trading and market making, today announced a partnership with Interhash, the mining services company incubated by cryptocurrency mining giant Canaan. The companies expect that the collaboration will bring professional risk management and execution services to Canaan’s substantial mining network.
GSR will offer a customized suite of structured products to mining counterparties beginning in January, 2020. These risk management solutions will allow miners to protect themselves against losses and earn extra yield on inventory. This product suite will consist of customized Swaps, Collars and more bespoke structured products.
“The cryptocurrency industry is more volatile than any other business area, and many participants in the ecosystem are under-hedged or outright un-hedged against adverse price action,” said Cristian Gil, Co-Founder of GSR. “Miners are a foundational component of the digital asset space, and have to consider many volatile factors when planning their future revenue streams.
“The cost of mining equipment and electricity are constantly in flux. Miners must also consider the asset’s mining difficulty and price. The unpredictability of their business models is unprecedented, so it is natural that this segment of the market is exploring ways to better hedge their risk. We are pleased to help build customizable risk management solutions alongside Interhash, who are global leaders in the industry.”
At current prices, roughly $3B USD of Bitcoin will be mined in 2020 alone. “The market for hedging is small when compared to physical commodities markets, however it is compelling for a variety of reasons. Unlike traditional commodities, digital commodities are experiencing rapid growth. Plus, given Bitcoin’s ‘constant supply’ dynamics and other unique characteristics, new products are required to properly deliver quality risk management solutions to miners,” added Richard Rosenblum, Co-Founder of GSR.
In traditional markets, the majority of corporate players have hedging programs. In crypto, as portfolio sizes increase and capital expenditure grows, it is prudent for management to explore hedging now that the relevant resources are becoming available.
Cora Jiang the Global Marketing Director of Interhash added, “We believe risk management will play an integral role in this industry as it matures. We are proud to partner with GSR who have substantial financial expertise in this area and a proven track record in crypto finance.”
GSR, founded in 2013, is the global leader in digital asset trading and market making. We specialize in providing liquidity, risk management strategies and structured products to sophisticated global investors and others in the digital assets industry. We’re one of the oldest established institutional market makers for digital assets and a pioneer in developing digital asset derivatives, algorithmic solutions and proprietary trading strategies. Our leadership team of veteran finance and technology executives from Goldman Sachs, Two Sigma, Nomura International, IBM and Oracle, among others, has created one of the world’s fastest, most robust and transparent digital asset trading systems.
GSR works with token issuers, traders, investors, miners, and more than 30 cryptocurrency exchanges around the world. As a founding member of The Association for Digital Asset Markets (ADAM) GSR is also a leader in establishing and maintaining industry standards and protocols to support the healthy development and evolution of the global digital assets industry. To learn more about GSR, please visit: www.gsr.io