Author Archives: ontheblock1

SeedCX Partners with Deltix for Crypto Trading

Seed CX, an exchange for institutional trading and settlement of spot digital asset products, announces that investors can now access its market via Deltix’s crypto-trading platform, CryptoCortex.

Deltix, which launched the CryptoCortex platform this year, provides quantitative research, analytics and algorithmic trading solutions for equities, futures, options and FX.

Deltix’s CryptoCortex trading platform is preferred by the world’s most sophisticated quantitative trading firms and market makers, and we expect strong demand for trading on Seed CX’s spot and derivatives markets,” says Ilya Gorelik, founder and CEO of Deltix.

“We are excited about connecting Deltix’s CryptoCortex platform to Seed CX, as it allows for frictionless access to our markets,” says Edward Woodford, co-founder and CEO of Seed CX. “Partnering with Deltix is another step in Seed CX becoming the digital asset trading standard for institutional investors.”

David Neulle, managing director at Chicago-based Hehmeyer Tading + Investment, says that his firm is excited to begin trading on Seed CX, adding: “We believe that Seed CX will bring the level of professionalism to the digital asset markets that we have come to expect in other conventional markets. The combination of a broad product mix and superior technology will enable Seed CX to become a leading exchange in the digital asset space. We also believe its business model as a regulated SEF will appeal to the institutional community. We intend to be very active on Seed CX from inception.”

Avelacom Partners with XTRD for Low Latency Crypto Access

Avelacom announced that it has partnered with XTRD to provide low latency access to all major crypto exchanges globally.

The sub-millisecond market data and order routing, delivered over the Avelacom network, is designed to help XTRD to aggregate liquidity across exchanges in Asia, Europe and the US in the fastest way. In particular, this partnership should enable improved arbitrage strategies across the top 10 Asian cryptocurrency exchanges, such as BitMEX, Binance, Bittrex, Huobiand OKEx.

Commenting on the partnership, Aleksey Larichev, Avelacom’s managing director, says: “We found a big gap between the demands of our institutional clients and the typical solutions provided over the Internet. Web-based applications will never meet the expectations of institutional investors. We are best known for working with global market makers and HFTs, so it was natural for us to adapt our IT infrastructure for institutional crypto trading. We are glad to be part of the crypto evolution and to help shape it into a more developed and professional-grade market.”

Serg Gulko, XTRD’s CTO and founder, comments: “Our team has over 30 years of experience building robust, battle-tested trading systems in FX, equities, derivatives, and other instruments. Definitely our aim in cryptocurrency markets is to provide the same grade solutions for our investor clients. Avelacom came up with a solution that helps to improve market data services and allows us to provide our institutional clients with best-in-class services in crypto markets.”

Avelacom Adds Tokyo Connection

Avelacom has announced the launch of a new point of presence in Equinix’s Tokyo (TY3) International Business Exchange data centre, providing trading firms with faster and more reliable connectivity between TY3 and Equinix’s London (LD4/5) data centre facilities. The new London – Tokyo route delivers the lowest latency in the market – 145.3 milliseconds (round-trip), the firm claims.

The new connectivity is designed to serve the needs of financial services firms, enabling them to access market data and send orders at the highest possible speed and improve overall trading performance.

“Platform Equinix is home to the world’s largest multi-asset trading venues and provides interconnection between ecosystem participants to accelerate business performance,” says Russell Poole, managing director, Equinix UK. “Avelacom’s new PoP offers increased opportunities for FX market players, as latency sensitive traders access the London-Tokyo route.”

Aleksey Larichev, Avelacom’s managing director, adds,  “The London – Tokyo route has always been associated with latency and redundancy issues because of its great distance and the multiple territories through which the data has to travel. Most market participants experience round-tip latency of around 156 milliseconds, but by switching to Avelacom’s network they can shave off more than 10 milliseconds, significantly improving data speed and overall performance.

“Connectivity is one of the key drivers for success in the electronic trading environment, and our London – Tokyo ultra-low latency offerings give companies a true competitive edge,” he adds.

Does the Crypto Price Plummet Tell the Whole Story?

“Looking for Liquidity” is taking place at The Princeton Club of New York, December 4th, 4.30-7.30pm. Open to investors and trading firms only, to RSVP email gina@profit-loss.com

At the start of 2018, the total market capitalisation of cryptocurrencies was above $828 billion, with many predicting that it would only rise further. Now, that market capitalisation is below $130 billion and continues to fall. Meanwhile, the price of bitcoin is down to $3,688, a 42% month-on-month drop and 65% year-on-year.

But does the price action of cryptos tell the whole story in this space right now? And what are the implications of this bear market on liquidity?

After all, the Intercontinental Exchange (ICE) and Nasdaq both plan to launch new crypto trading platforms next year, while Fidelity is also set to launch an asset custody service in 2019. Trading volumes on the CME and CBOE bitcoin futures have ticked up even as (because?) the market price has trended down and there are still ETF proposals sitting on US regulators’ desks that could still be approved.

Could it be that even as retail liquidity is drying up, more institutional liquidity is edging closer?

These are among the key questions that will be addressed at the upcoming OnTheBlock event, “Looking for Liquidity” taking place on December 4th at the Princeton Club of New York. This event, which is open only to investors and trading firms and is sponsored by Genesis Trading, will begin with a fireside chat featuring Daniel Gorfine, Chief Innovation Officer and Director of LabCFTC, who will provide a unique insight into how the US regulator is approaching the crypto space.

This will be followed by a panel discussion featuring crypto-experts that are active in the markets today on the evolving nature of liquidity within the crypto space and then an audience-led Q&A session:

Moderator: Galen Stops, Editor, Profit & Loss

Speakers:

LabCFTC Releases Smart Contracts Primer

The Commodity Futures Trading Commission’s LabCFTC has released, “A CFTC Primer on Smart Contracts”. The primer is part of LabCFTC’s effort to engage with innovators and market participants on a range of fintech topics, and follows on from a 2017 primer on virtual currencies. 

“Smart contracts are being used to drive further automation in our markets and may have an impact across a range of economic activities,” says LabCFTC director Daniel Gorfine. “This primer is focused on explaining smart contracts, exploring how they may impact our markets and highlighting potentially novel risks and challenges.”

The primer sets out to define “smart contracts”, including by exploring their history, characteristics, and potential applications that may eventually impact daily life. The primer explains early self-executing software logic evolving into current smart contract technology – for example, starting with a simple vending machine illustration and then discussing more complex examples, including credit default swap contracts. 

The primer works through a range of operational, technical, cybersecurity, fraud and manipulation, and governance risks and challenges. The primer goes on to speak to the CFTC’s role to protect market users and their funds, consumers, and the public.  

The primer looks at some of the potential use cases for smart contracts in financial market operations. Among these are derivatives, whereby LabCFTC says smart contracts could potentially streamline post-trade processes, real time valuations and margin calls. It also notes that in the realm of trade clearing and settlement, smart contracts could improve efficiency and speed of settlement with less misunderstandings of terms. Additionally, smart contracts could provide greater standardisation and accuracy of data reporting and recordkeeping (e.g., swaps data reporting, regulator nodes for real time risk analysis); as well as automated retention and destruction.

The primer also sets out the potential for such contracts to streamline trading of products subject to oversight by the CFTC (e.g., options, futures, and swaps) and enhance efficiency from pre-trade through post-trade (e.g., price discovery, execution, clearing, and settlement). Among the potential benefits noted are a reduction of duplicative confirmation; a reduction oftrade, capital, and margin risks; automated fulfillment of contracts; enhanced compliance with internal written policies and procedures and with legal obligations and regulatory requirements; as well as Improved regulatory reporting.

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