Australia-based digital asset firm Zerocap is in a first-class position to observe the development of the structured product space, after operating OTC, marketing, derivatives and crypto-parenting authorities since it was founded in 2018.

Here, Zerocaps Sales Manager Mark Hiriart is discussing how these products are changing, a new semi-principled product that his company launches how the demand for structured products varies according to the geographical region and the most unusual structured product request he has seen.

Tell us about Zerocap.

Zerocap is Australia’s leading institutional digital assets company that was established in 2018. We run several business lines, including an OTC desktop, marketing and derivatives business, all supported by our custody offer. We act as a company’s authorized representative of an Australian Financial Services License (Revel) holder that authorizes us to trade financial products such as derivatives with wholesale accredited investors. We have also set up a number of high -profile partnerships with institutions such as Anz Bank for their stableecoin and Reserve Bank of Australia (RBA) for various evidence of concepts and pilots. While we have become the leading liquidity player in Australia for the past 18 months, our range stretches clients in over 50 countries.

You recently announced a new product – tell us about it.

We have collaborated with Coindesk indexes to launch a semi-principle-protected structure on the Coindesk 20 index (CD20). The product gives upward exposure to CD20 with main protection that limits downward risk to 5%, while offering up to 40% return potential upside down. This is the first in a number of structured products we create with Coindesk index, with different payments for different risk appetite.

The timing is particularly relevant considering the current market atmosphere. With the rally in digital assets around Trump and potential global trade winds to navigate, we expect a sideways in the short term. This intermediate risk exposure product is suitable for the current macro environment.

Which gap in the market fills your new product and who is it designed for?

In the digital asset room we have not established benchmarks, as there are in traditional markets. For example, if an Australian investor or someone in Hong Kong wants us technical exposure, they typically look for products associated with NASDAQ or QQQ ETF. In crypto, we haven’t had that level of indexization yet. This product is designed for three groups: family offices and individuals with high net worths seeking to enter the room; Investors who want broad -based crypto exposure without deep diving in individual assets; And those who understand Bitcoin but want diversified exposure with controlled risk.

Why did you choose to base it on the Coindesk 20 index?

We chose Coindesk 20 index of four key causes. The one we respect the deeply Coindesk mark and the quality of their index team. Two, our strong relationship with Bullish gives access to future contracts for cover. Three, which is a clear market need for index products in the crypto area. And finally, my background in equity divisions at Investing Banks shows me how people use these products, and it’s a natural development for crypto.

How does structured products develop?

Two main factors have historically limited structured product uptake: one, high crypto volatility meant that simple spot positions could yield a significant return, and two, the occurrence of eternal future with high leverage reduced demand for opportunity markets. However, this balance changes as several participants have structural positions. Venture products, portfolio managers with value -based assignment policies and large mandate holders need specific cover solutions that eternal cannot provide due to path dependence.

What influence does the emergence of crypto -Tfs have on structured products?

ETFs serve as a “gateway drug” for structured products rather than cannibalizing them. The introduction of products such as Blackrock ETF has brought new participants into the crypto area. As these investors become comfortable with crypto exposure through ETFs, they naturally move on to exploring more sophisticated products for improved returns or risk management.

What institutional demand patterns do you see for crypto -structured products in Asia versus other regions?

Asia typically shows a strong appetite for auto-call structures where investors sell disadvantages or sets to receive large coupons based on price targets. This differs from the more conservative approach in American and European markets. After working at JP Morgan and Morgan Stanley in trading in shares, I have seen these regional differences from the first hand.

Australia sits somewhere in between, and at Zerocap we have successfully converted non-structured product players to crypto-structured product users. We want to expand this expertise to Asia, subject to regulatory requirements.

Are we in danger of over construction of Crypto’s volatility out of existence?

When crypto develops, different assets naturally have different volatility profiles. While stablecoins maintain stability and Bitcoin’s volatility can dampen with institutional adoption, there is still plenty of high volatility exposure down the market’s cap curve, from Solana to Memecoins. The market matures to meet different investor needs. For portfolio allocation, whether 1%, 2%or 5%, investors need wide beta exposure through established assets such as Bitcoin and Ether, supplemented with smaller allocations to new options.

What has been the most unusual structured product request you’ve seen?

We are one of the few desks globally that offers derivatives on all coins, which is why we are asked to price some wild and crazy things. I can officially confirm that we have recently acted an opportunity on Fartcoin, which is something for someone who has spent his career in the big US banks!

Where do you see defi and traditional structured products with that in mind?

While defi and structured products present interesting possibilities, we need to recognize that Crypto is already complex and structured products add another layer of complexity. However, tokenization makes sense for legal documentation and fungalability as you can revise source code to understand exactly what you get. This space will grow with the real world (RWA) tookenization, but widespread adoption can take time.

When do you think digital assets will be long -term investment?

The transition from trading vehicles to long -term investments will occur as protocols and tokens show clear value proposals and use cases. Bitcoin has proven to be considered digital gold, while it can still be discussed for Callthereum “Ultrasound money”. Other protocols are still struggling to find their niche and demonstrate concrete value in the digital economy. As these assets become more integrated into economic systems, their long -term value proposals will become more measurable.

For more information, visit https://zerocap.com/.

The views and opinions of the authors are their own and not associated with Coindesk indexes. The interview was conducted by Coindesk -Indexes and is not associated with Coindesk editorial.

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