It’s halfway through 2018, and the crypto landscape is maturing quite well with the advent of normalization, custody, technology, and regulatory clarity.
In a major milestone last month, Ethereum and Bitcoin were declared non-securities by the SEC, paving the way for capital inflows and greater regulatory certainty. A new Bitcoin ETF application was filed, we will hopefully hear the SEC confirmation by 8/10 but likely it will be pushed another 45 days as per approval guidelines. BlackRock is exploring the space too, after their leading employees left to start crypto companies. Participating in the blockchain space is quickly becoming less of a me-too progressive fad for larger organizations and more of a must-have to keep up with rapid developments and client demand for exposure.
This time it’s different — there is custody, more regulatory clarity, minimums that will necessitate larger/accredited investor participation and the entity applying is the CBOE and VanEck.
On the XTRD side, we are seeing the demand for our products spike — but some are in greater demand than others. In particular, this is true of the XTRD Dark Pool solution, leveraging actual banking custodians for fiat and digital asset custodians for crypto to allow for cheap, easy, and vetted large OTC trades.
In line with our road map, we have recently released our FIX API, the unified market data and execution API for institutional use. The following product is to be a downloadable trading platform called XTRD PRO that allows for manual execution across exchanges.
However, given enormous institutional interest in the Dark Pool product, we have decided to prioritize XTRD Dark first. We feel that adjusting to market needs is important, and as the blockchain industry changes quickly, we must be nimble in order to meet incoming demand head on.
For fiat custodianship, the solutions we are leveraging are Noble Markets and Signature Bank, allowing for custody and seamless journal transfers of tens to hundreds of millions of dollars on the fiat side of the XTRD Dark trades.
On the crypto escrow side, we are exploring itBit (US based and fully licensed), DACC (physical custody in secure environment dealing with over 70 tokens) and Noble (digital custody coming!).
By integrating these fiat and digital custody solutions along with a dark matching engine and white-listed participants, a vetted, KYC enabled, fund verified trusted XTRD Dark Pool environment will facilitate hundreds of millions of dollars of large crypto to fiat trades at 20x less cost than current exorbitant OTC transaction middlemen fees.
XTRD PRO and XTRD SPA continue to be our focus and we are aiming to bring them online in 2018, with XTRD PRO coming first. On the XTRD PRO side, we’ll be publishing live screenshots as soon as the production version is in testing. An updated roadmap will be published soon as well.
Also — Thomas Lee’s analysis of the potential scope of the crypto market as driven by a generational shift is quite illuminating — see it here, highly recommended.