At a panel discussion at the recent DigiAssets conference in London, industry leaders and market participants representing TradFi and DeFi came together to explore how derivatives and structured products are shaping institutional crypto engagement and strategy.
Marex Solutions’ Harry Benchimol, Co-Head of Marex Derivatives Engine, contributed to a lively debate with panellists representing asset managers, service providers and sell side platforms, that considered how the crypto/DeFi market is evolving to offer yield, hedging and risk management benefits to the institutional investor segment, and the pros, cons and institutional use cases for crypto assets in yield generation strategies.
Interestingly, while some panellists felt that the pace of innovation in structuring crypto-linked solutions remained slow and niche, others – including Harry – had a different perspective and direct experience of tangible progress in bridging traditional finance and digital assets.
“Structured products offer a familiar and bankable way for traditional finance to access the crypto market. Packaged as securitized notes with ISINs, they fit seamlessly into existing workflows, allowing institutions to gain exposure to this new asset class just as they would in equities, FX, or rates.”
While many investors may start with conservative trades like Bitcoin basis, Marex Solutions’ experience is they move inexorably toward more sophisticated structures with greater market exposure through yield enhancement, participation, or capital protection strategies, across an expanding range of crypto underlyings.
Wrapping traditional products around new digital assets
The entry point for most institutions embracing crypto is “familiarity”. Changing mindsets and behaviours of traditional financial markets participants is typically challenging – asset allocators and trading desks don’t necessarily want to reinvent familiar processes, but to apply known strategies to new markets and opportunities.
That’s why Marex Financial Products approach is to replicate the mechanics of traditional product structuring, with cryptocurrency as the underlying asset.
“The idea is to remove all of the complexity for clients. ‘You’re used to buying an equity-based structured product? Great! We can build it exactly the same way, except the asset is different.”
This approach allows institutions to engage in crypto, without needing to overhaul infrastructure or risk models: Fully regulated channels and investment-grade wrappers make access to digital assets as straightforward as buying a note on Apple or Google.
Basis trades: The institutional foot in the door?
Despite market volatility, the basis trade continues to resonate as one of the most accessible and intuitive strategies for institutional investors. In essence, it exploits the difference between spot and futures prices, and when structured properly, it offers compelling, market-neutral yield potential.
Prior to the advent of Bitcoin ETFs, retail-driven demand for leverage, limited access to custody solutions – and the crypto-native phenomenon of being “crypto rich, cash poor” – all helped to drive premiums in futures markets. Although yields have since compressed, appetite remains strong for regulated, yield-bearing instruments that offer regulated, crypto-linked exposure without directional risk.
Regulated infrastructure matters
One of the most pressing themes from the discussion was the divide between crypto-native practices and institutional requirements. While some participants lamented the fragmentation of venues and lack of interoperability between them, there was nonetheless consensus that institutional capital markets demand regulated infrastructure, capital efficiency and transparency.
For many investors, particularly those steeped in traditional finance, crypto remains opaque or misunderstood. “It’s not about convincing someone to put their house on Bitcoin. It’s about building a safe gateway to crypto exposure in a regulated, transparent way.”
Marex is proactive in this regard. “We’re not waiting for regulation to catch up. We’re doing the work now — building within regulated frameworks and partnering with credible players. Today, we’re an investment-grade issuer offering crypto-linked structured products, governed by the same stringent protocols we apply to equity and fixed income.”
Every Marex Financial Products structured product – regardless of asset component – is issued under the same governance, ISIN structure and investment-grade issuance as its equity-linked notes. This institutional lens also reframes the idea of capital protection in the crypto space: The solution? Pricing risk properly, setting expectations clearly and offering transparency around operational, cybersecurity and counterparty exposures.
During the panel, there was a comment suggesting that structured products lack transparency and mislead investors by promising guaranteed returns while exposing them to capital loss. This is a fundamental misunderstanding. There’s a critical distinction between “guaranteed return” and “defined return”.
Harry offered some clarification
“This is a fundamental misunderstanding. All of our structured products are formula-based, meaning every possible outcome is clearly defined upfront, including conditions under which capital may be at risk. There is no discretion in the final payout. Investors know precisely how the product will behave across different market scenarios. That’s transparency by design.”
Structuring for yield, but with guardrails
A key driver for most institutional clients remains yield. In high-volatility markets like crypto, the options premium can be significant – especially when structured thoughtfully, using downside buffers or capped upside.
“Clients are looking for yield… and the right structured solutions offer partial downside protection, while tapping into the considerable upside potential of crypto. Whether it’s autocallables, capital-protected or participation notes, the high implied volatility of digital assets creates the opportunity to extract substantial premium”
A niche market…..but not for long
Marex Financial Products has spent years building a reputation for transparency and conservative structuring, traits that are especially critical when navigating the volatile waters of digital assets. Since 2021, crypto has formed part of our product universe – not as a novelty, but as a new and integral currency layer that can be applied to traditional frameworks.
Despite rising interest, however, crypto-linked structured products still represent a small fraction of the overall market. The panel was questioned as to whether structured crypto products could – and would – truly scale, citing limitations in product availability, regulatory clarity, and risk appetite. But volume trends and client demand suggest momentum is building – and accelerating.
“Crypto is still a small part of the structured products market – but there’s immense room for growth. We’ve already issued over $1 billion in products linked to crypto.”
With increasing institutional comfort – evidenced by the increasing engagement of some banks, family offices and traditionally conservative allocators – the building blocks are in place. Structured correctly – with credibility, regulation, and clarity – we believe that digital assets will move increasingly from the periphery to the core of portfolio allocation decisions.
The final word from Harry?
“Structured products remain one of the most effective entry points for traditional investors seeking exposure to crypto. They provide a familiar, regulated format that allows clients to start with conservative strategies, before moving into more directional or yield-focused structures with capital at risk. “At Marex, we offer a comprehensive range of crypto-linked structured products and are proud to be a provider in the space with an investment-grade credit rating, giving institutional clients the confidence and security they expect.
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