New Player in town，Dragon Victory International Enters Cryptocurrency Derivative
New Player in town，Dragon Victory International Enters Cryptocurrency Derivatives Market
Recently the market has entered the earnings season of listed companies. Each company intensively released earnings reports, not only announcing the 2021 earnings data, but also taking the opportunity to actively show the market the future direction of the company.
Dragon Victory International (NASDAQ:LYL) released the earnings report on March 14, 2022 for the fiscal year 2021 interim period (March 31, 2021 to September 30, 2021). The company reported a comprehensive loss of $7.06 million, and revenue of $1.23 million, up by 2,440.54% year-over-year.
The numbers alone are not satisfactory, but the subsequent events section of the earnings report reveals an interesting piece of information about the company; the company has made a series of business transformations after September 30, 2021, shifting the company's focus to a business layout in the field of cryptocurrency derivatives.
The earnings report mentions that on October 29, 2021, the Company, through its subsidiary Meta Rich, established Metalpha Limited, a company focused on cryptocurrency derivatives. Meta Rich and Antalpha each holds 51% and 49% of the Metalpha. According to public information, Antalpha is a wholly owned subsidiary of Antpool Technologies Holding Company who is currently the owner and operator of Antpool, one of the world's largest bitcoin mining pools.
On December 23, 2021, Metalpha entered into a series of transaction agreements with Antalpha in which Antalpha purchased various cryptocurrency derivatives from Metalpha. The underlying assets of the cryptocurrency derivative products include Bitcoin, Ethereum, Binance Coin and Tether. As of February 28, 2022, the total value of the products purchased was approximately $5 million.
From the end of December 2021 to the end of February 2022, in just two months into the testing phase, Metalpha has completed $5 million in product subscriptions, which on the one hand shows the company's firm determination to develop new businesses and on the other hand shows that there is a strong demand for cryptocurrency derivatives in the market.
This is quite understandable. As cryptocurrencies are becoming an integral part of mainstream financial products, a large number of financial institutions and high net worth individuals are beginning to hold cryptocurrencies. Those investors have strong needs for earning interest and hedging risk on their holdings, and derivatives are the best tool to fulfill those needs.
In traditional financial markets, trading volume of derivatives is higher than that of the spot market. In the foreign exchange market, for example, derivatives turnover is three times higher than spot. In 2019, annual spot trading volume in cryptocurrencies reached $13.8 trillion, while annual derivatives trading volume was only $3 trillion, less than 25% of the spot market. It is obvious that there is a huge growth potential in the world of cryptocurrency derivatives.
Dragon Victory International has chosen to enter the cryptocurrency derivatives market to capture the growth opportunity and has actively cooperated with the leading market players showing clear strategic vision and strong execution capability. We believe that Metalpha can not only offer products that can reduce the risk associated with the volatility of crypto assets but also serve as a digital asset financial service platform to provide consulting services for investors' asset management. Such strong development prospect of Metalpha will also drive Dragon Victory International to have excellent performance in the global capital market.
Recently the market has entered the earnings season of listed companies. Each company intensively released earnings reports, not only announcing the 2021 earnings data, but also taking the opportunity to actively show the market the future direction of the company.
Dragon Victory International (NASDAQ:LYL) released the earnings report on March 14, 2022 for the fiscal year 2021 interim period (March 31, 2021 to September 30, 2021). The company reported a comprehensive loss of $7.06 million, and revenue of $1.23 million, up by 2,440.54% year-over-year.
The numbers alone are not satisfactory, but the subsequent events section of the earnings report reveals an interesting piece of information about the company; the company has made a series of business transformations after September 30, 2021, shifting the company's focus to a business layout in the field of cryptocurrency derivatives.
The earnings report mentions that on October 29, 2021, the Company, through its subsidiary Meta Rich, established Metalpha Limited, a company focused on cryptocurrency derivatives. Meta Rich and Antalpha each holds 51% and 49% of the Metalpha. According to public information, Antalpha is a wholly owned subsidiary of Antpool Technologies Holding Company who is currently the owner and operator of Antpool, one of the world's largest bitcoin mining pools.
On December 23, 2021, Metalpha entered into a series of transaction agreements with Antalpha in which Antalpha purchased various cryptocurrency derivatives from Metalpha. The underlying assets of the cryptocurrency derivative products include Bitcoin, Ethereum, Binance Coin and Tether. As of February 28, 2022, the total value of the products purchased was approximately $5 million.
From the end of December 2021 to the end of February 2022, in just two months into the testing phase, Metalpha has completed $5 million in product subscriptions, which on the one hand shows the company's firm determination to develop new businesses and on the other hand shows that there is a strong demand for cryptocurrency derivatives in the market.
This is quite understandable. As cryptocurrencies are becoming an integral part of mainstream financial products, a large number of financial institutions and high net worth individuals are beginning to hold cryptocurrencies. Those investors have strong needs for earning interest and hedging risk on their holdings, and derivatives are the best tool to fulfill those needs.
In traditional financial markets, trading volume of derivatives is higher than that of the spot market. In the foreign exchange market, for example, derivatives turnover is three times higher than spot. In 2019, annual spot trading volume in cryptocurrencies reached $13.8 trillion, while annual derivatives trading volume was only $3 trillion, less than 25% of the spot market. It is obvious that there is a huge growth potential in the world of cryptocurrency derivatives.
Dragon Victory International has chosen to enter the cryptocurrency derivatives market to capture the growth opportunity and has actively cooperated with the leading market players showing clear strategic vision and strong execution capability. We believe that Metalpha can not only offer products that can reduce the risk associated with the volatility of crypto assets but also serve as a digital asset financial service platform to provide consulting services for investors' asset management. Such strong development prospect of Metalpha will also drive Dragon Victory International to have excellent performance in the global capital market.