Wall Street Firms Which Enter the Market Claim That Wall Street is Stabilizing the Crypto Price Spreads

Crypto Land News
Sep 3, 2018 · 2 min read

Wall Street firms are entering the market

The price variations of cryptocurrencies across different exchanges have importantly dropped in the last several months. According to one firm, the increased stability is beneficial to the ecosystem, and it can be linked to some institutional investors. According to some data from SFOX, which is crypto trading technology firm, which was published by Business Insider, the drop-off in price variations across crypto exchanges is related to Wall Street firms which enter the market.

The head of growth at the firm, named Danny Kim stated that before institutional firms were actively trading crypto or heavily involved, the differences in the price of Bitcoin between exchanges varied as high as 4.5%.

Kim also noted that the differences in price are now of no more than one-tenth of 1%, which is a dramatic decrease. According to SFOC, such type of stability is crucial as it actually means that more merchants are going to be comfortable with accepting cryptocurrency payments, which are going to lead to broader adoption.

In fact, there were a few Wall Street firms which were entering the market. Earlier in this month, Goldman Sachs became the latest investment bank which explored a crypto custody service. The owner of the NYSE, ICE, has partnered with Microsoft in order to launch a crypto platform which was called Bakkt.

Bakkt is actually set to offer physically-settled Bitcoin futures contracts, as well as help merchants to accept cryptocurrency payments. The CEO of Bakkt, named Kelly Loeffler, has revealed that the buying and selling of Bitcoin are going to be fully collateralized or pre-funded on the platform.

HFT firms trade cryptos since 2014

According to one report which has been published by Grayscale Investments, which is a subsidiary of Barry Silbert’s Digital Currency Group, there was a steady growth of net inflows into its funds in the first half of 2018. About more than a half of these inflows came from institutional investors.

Their entering to the market was facilitated by the developments in trading technology. These help high-frequency trading firms or HFTs actually improve their cryptocurrency-related efforts.

For Kim, different HFT firms were trading cryptos since 2014, but they were limited by the existing infrastructure. He stated that most if not all HFT firms require a FIX connection at an exchange so that they would trade efficiently. Crypto exchanges did not offer FIC connectivity until recent times.

Read more: https://cryptolandnews.com/wall-street-firms-which-enter-the-market-claim-that-wall-street-is-stabilizing-the-crypto-price-spreads/

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