Australia-based digital asset firm Zerocap is in a prime position to observe the development of the structured product space, having operated OTC, market making, derivatives and crypto custody businesses since it was founded in 2018.

Here Zerocap’s head of sales Mark Hiriart discusses how these products are changing, a new semi-principal protected product his firm is launching, how demand for structured products varies by geographical region, and the most unusual structured product request he’s seen.

Tell us about Zerocap.

Zerocap is Australia’s leading institutional digital assets firm, established in 2018. We operate multiple business lines including an OTC desk, market making and derivatives business, all underpinned by our custody offering. We operate as a Corporate Authorised Representative of an Australian Financial Services License (AFSL) holder, which authorizes us to trade financial products like derivatives with wholesale accredited investors. We have also established a number of high-profile partnerships with institutions like ANZ Bank for their stablecoin, and the Reserve Bank of Australia (RBA) for various proof of concepts and pilots. While we’ve become the leading liquidity player in Australia over the last 18 months, our reach extends to clients in over 50 countries.

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

We’ve partnered with CoinDesk Indices to launch a semi-principal-protected structure on the CoinDesk 20 Index (CD20). The product offers upside exposure to the CD20 with principal protection limiting downside risk to 5%, while offering up to 40% return potential on the upside. This is the first in a series of structured products we’ll be creating with CoinDesk Indices, featuring different payoffs for various risk appetites.

The timing is particularly relevant given the current market sentiment. With the rally in digital assets around Trump and potential global trade headwinds to navigate, we anticipate some sideways action in the near term. This medium-risk exposure product is well-suited to the current macro environment.

What gap in the market does your new product fill, and who is it designed for?

In the digital asset space, we don’t have established benchmarks like there are in traditional markets. For example, if an Australian investor or someone in Hong Kong wants U.S. tech exposure, they typically look for products linked to the 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 high-net-worth individuals seeking to enter the space; investors wanting broad-based crypto exposure without deep diving into individual assets; and those who understand bitcoin but want diversified exposure with managed risk.

Why did you choose to base it on the CoinDesk 20 Index?

We selected the CoinDesk 20 Index for four key reasons. One, we deeply respect the CoinDesk brand and their index team’s quality. Two, our strong relationship with Bullish provides access to futures contracts for hedging. Three, there’s a clear market need for index products in the crypto space. And lastly, my background in equity derivatives at investment banks shows me how people use these products, and it’s a natural evolution for crypto.

How are structured products evolving?

Two main factors have historically limited structured product adoption: one, high crypto volatility meant simple spot positions could provide significant returns, and two, the prevalence of perpetual futures with high leverage reduced demand for options markets. That balance is shifting, however, as more participants hold structural positions. Venture funds, portfolio managers with value-based allocation policies and large mandate holders need specific hedging solutions that perpetuals can’t provide due to path dependency.

What impact is the advent of crypto ETFs having on structured products?

ETFs serve as a «gateway drug» to structured products rather than cannibalizing them. The introduction of products like the BlackRock ETF has brought new participants into the crypto space. As these investors become comfortable with crypto exposure through ETFs, they naturally progress to exploring more sophisticated products for enhanced returns or risk management.

What institutional demand patterns are you seeing for crypto structured products in Asia versus other regions?

Asia typically shows a strong appetite for auto-call structures, where investors sell downside or puts to receive large coupons based on price targets on the upside. This differs from the more conservative approach in U.S. and European markets. Having worked at JP Morgan and Morgan Stanley in equity derivatives trading, I’ve seen these regional differences firsthand.

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

Are we at risk of over-engineering crypto’s volatility out of existence?

As crypto develops, different assets naturally have different volatility profiles. While stablecoins maintain stability and bitcoin’s volatility may dampen with institutional adoption, there’s still plenty of opportunity for high-volatility exposure down the market cap curve, from Solana to memecoins. The market is maturing to cater to different investor needs. For portfolio allocation, whether it’s 1%, 2% or 5%, investors need broad beta exposure through established assets like bitcoin and ether, complemented by smaller allocations to emerging opportunities.

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

We are one of the few desks globally that offer derivatives on alt coins and hence we get asked to price some wild and wacky things. I can officially confirm that we have traded an option on FARTCOIN recently, which is quite something for someone who has spent his career at the big US banks!

With that in mind, where do you see DeFi and traditional structured products intersecting?

While DeFi and structured products present interesting opportunities, we need to acknowledge that crypto is already complex, and structured products add another layer of complexity. However, tokenization makes sense for legal documentation and fungibility, since you can audit source code to understand exactly what you’re getting. This space will grow with real-world asset (RWA) tokenization, but widespread adoption may take time.

When do you think digital assets will become long-term investments?

The transition from trading vehicles to long-term investments will occur as protocols and tokens demonstrate clear value propositions and use cases. Bitcoin has proven itself to be viewed as digital gold, while it is still debatable to callEthereum «ultrasound money”. Other protocols are still fighting to find their niche and demonstrate tangible value in the digital economy. As these assets become more integrated into economic systems, their long-term value propositions will become more measurable.

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

Authors’ views and opinions are their own and not associated with CoinDesk Indices. The interview was conducted by CoinDesk Indices and is not associated with CoinDesk editorial.

CoinDesk Indices, Inc., including CC Data Limited, its affiliate which performs certain outsourced administration and calculation services on its behalf (collectively, “CoinDesk Indices”), does not sponsor, endorse, sell, promote, or manage any investment offered by any third party that seeks to provide an investment return based on the performance of any index. CoinDesk Indices is neither an investment adviser nor a commodity trading advisor and makes no representation regarding the advisability of making an investment linked to any CoinDesk Indices index. CoinDesk Indices does not act as a fiduciary. A decision to invest in any asset linked to a CoinDesk Indices index should not be made in reliance on any of the statements set forth in this document or elsewhere by CoinDesk Indices. All content displayed here or otherwise used in connection with any CoinDesk Indices index (the “Content”) is owned by CoinDesk Indices and/or its third-party data providers and licensors, unless stated otherwise by CoinDesk Indices. CoinDesk Indices does not guarantee the accuracy, completeness, timeliness, adequacy, validity, or availability of any of the Content. CoinDesk Indices is not responsible for any errors or omissions, regardless of the cause, in the results obtained from the use of any of the Content. CoinDesk Indices does not assume any obligation to update the Content following publication in any form or format. © 2025 CoinDesk Indices, Inc. All rights reserved.

Ethereum is set to discontinue its largest test network, Holesky, after it encountered challenges testing the forthcoming Pectra upgrade.

The Ethereum Foundation (EF) said in a blog post on Tuesday that the network — a controlled environment for testing Ethereum infrastructure and upgrades — will begin winding down, with a full shutdown anticipated on Sept. 30. The just-launched Hoodi test network, deployed on Monday, will serve as Holesky’s replacement.

The deprecation plan comes after Holesky fell offline due to February’s faulty test of Ethereum’s upcoming Pectra update. Developers took weeks to recover Holesky, which came back online in March but suffered from residual damage — so-called «inactivity leaks» that clogged up Holesky’s entire validator apparatus.

“[E]xited validators would take approximately one year to fully be removed from the validator set,” the EF explained in their blog post. “The size of the exit queue prevents Holesky from being used to test the full validator lifecycle within a reasonable timeframe.”

Ethereum runs testnets so that developers can run code changes before bringing them to Ethereum’s main network (mainnet). Test networks essentially replicate the Ethereum mainnet, and they allow developer teams and infrastructure providers to test out new software before launching them in a more high-stakes environment.

Holesky was specifically intended for testing by Ethereum’s validator ecosystem — the stakers and node operators that keep the Ethereum network up and running. It was built to model close-to-real network conditions with its support for a giant 1.4 million validators — more than Goerli, which Holesky replaced in 2023, and even the real Ethereum network.

Currently, Holesky is used by validators and staking providers, but the similarly-constructed Hoodi network will serve that function moving forward. Hoodi went live earlier this week and plans to test the Pectra upgrade on March 26. Should that test proceed smoothly, developers intend to push Pectra onto Ethereum’s mainnet 30 days later.

“Stakers, this is your new testing ground,” said Tim Beiko, the protocol support lead at the EF, in a post on X.

Read more: Hello, Hoodi: Ethereum Welcomes a New Testnet

In recent weeks, President Trump has taken steps to draw investment to the United States. His proposed Gold Card would allow foreign investors to purchase legal status in the United States for $5 million. In his Joint Address to Congress, he lauded a $200 billion direct investment from Japan’s SoftBank.

While there’s nothing wrong with soliciting offshore investment, the government is missing a key source of investment at home. The accredited investor rule — which says that individuals must have a net worth of more than $1 million, or annual income exceeding $200,000 — shuts too many Americans out of our most lucrative securities markets. It’s time to change that.

You’re reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Wednesday.

In the U.S., securities broadly fall into two categories: public and private. Public securities trade freely on national exchanges and are open to all investors, but they are extremely onerous to issue. Companies are required to navigate extensive regulatory and compliance requirements to “go public.” Their alternative is to stay private, and many companies like Stripe and SpaceX are choosing to do just that.

Private markets, however, come with a catch. In exchange for easing the burden of regulation, they restrict access to accredited investors. This means that 80% of American households that do not qualify are effectively shut out. As more businesses choose to stay private, more everyday Americans are prevented from building wealth alongside them.

In the old days, public markets were the deepest and most reliable sources of capital for large, high-growth companies. This was great for the public, because it meant they had access to the best investments. Times have changed, though.

According to SEC Commissioner Hester Peirce, “The once aspirational goal of becoming a public company seems to have lost its luster.” In recent years, private markets have grown at roughly double the rate of global public equity markets.

And a single SEC rule is to blame.

The accredited investor rule

The accredited investor rule, 17 CFR § 230.501(a), is an SEC regulation that restricts access to private investments. It sets criteria investors must meet to participate in offerings like Regulation D, the primary exemption private companies use to raise capital. In effect, the rule blocks millions of Americans from investing in the most promising companies.

Advocates defend this rule openly. “Knowledge cannot protect people from potential losses… Only financial resources can,” Patrick Woodall, director of policy at Americans for Financial Reform, told The Wall Street Journal last year.

We disagree. This paternalistic view assumes the public must be “protected” from itself. But the accredited investor rule doesn’t protect the public. It locks them out from investing in companies shaping the future like OpenAI, Anthropic and Perplexity.

The test

Last year, Sen. Tim Scott sponsored the Empowering Main Street in America Act (EMSAA), proposing, among other things, a test-in accredited investor definition.

A test-in policy has clear advantages. First, it’s fair. Any American who passes can invest. Second, broader access to private markets lets more Americans share in the country’s economic success. If we’re building here, everyone should be able to buy in. Third, expanding private markets makes them more useful.

But Sen. Scott’s bill is unnecessary — a test-in accredited investor rule doesn’t require new legislation. The SEC already has the power to implement it through Sec. 2(a)(15) of the Securities Act of 1933. Because of this, an amendment to the rule on these grounds is unlikely to encounter significant legal resistance. By amending the accredited investor rule, the SEC can reshape private markets through rulemaking alone. It should start tomorrow.