How to Improve Execution in Crypto Markets or XTRD’s Art of Shaving

By XTRD’s Co-Founder and CTO Serg Gulko

Among many technical questions we receive, the latency-related group definitely stands out. Having deep HFT roots, I fully share concerns about this topic. Back in the day, building strategies for FX markets, we were choosing one CPU family over the other, preferring to use switches and routers of certain non-mass-market brands, install and tune very specific network cards, and so on. By the way, we replicated all this in the XTRD eco-system, that is why our NY4 location is equipped with Aristas and Exablaze servers! 

But, of course, all these optimizations should be made only after your code is tuned to perfection. There is no economical sense of burning thousands of dollars on expensive hardware toys while you might have a bigger problem and it’s closer than you think. 

We’ve been consulting several so-called “crypto-first” prop trading shops who bought absolutely top of the line/high cost servers and rented private internet lines from Avelacom (by the way, we also use Avelacom for certain destinations) to shave 4-7 ms of network-added latency. But! And here comes the best part – they had plans to use the CCXT library to trade. Don’t get me wrong, CCXT is a great library and I personally do respect the Open Source community but CCXT is not about HFT! So the fund guys win 7 ms by using high end hardware and private networks but lose sometimes up to 200 ms by using the wrong software.

Why do I think XTRD can do any better? One of our main focuses was – and still are – lowering latency in all possible ways. We analyze exchanges’ APIs, measure execution times, and build our connectors in order to notify clients as soon as possible when something happens.

Let me give you an example. Bittrex has a REST API to submit orders and an event-driven notification channel built on top of the terrible Microsoft SignalR stack. SignalR, in its turn, provides information in “orders” and “executions” channels. Data from the “executions” channel is more informative and useful (at least from our standpoint) but sometimes it comes with 300 (!) ms delay after similar, but less granular, updates in “orders”. What is really funny is that initial responses over the REST API come (sometimes, not always, which makes it even more interesting) faster than confirmations through SignalR. We know all these nuances and our connectors are capable of dealing with such situations. Of course, it creates certain complexity and non-linear logic but this is what we do for living.

Another example – when you cancel an order on Binance, you can rely on WebSocket notifications (which is a very convenient way) but in many cases, the REST API gets you a faster response. How fast? 10 ms! So you’ll know that your order has been canceled 10 ms faster and act on it accordingly. In the HFT world 10 ms is almost an eternity. 

Each exchange has such “Easter eggs” and we know many of them. XTRD combines powerful hardware with a software layer, optimized to “shave” 10 ms here and 45 ms there. If you are committed to win, everything matters – your algo, the way it is coded, servers to run it, the right network to communicate, and a reliable partner to execute. Cut these latencies with XTRD, join the club! 

Top 5 Quant Trading and Algotrading Blogs


QuantInsti describes itself as a company that provides innovation and solutions to bridge the gap between finance and technology in the changing phase of the industry. It serves individuals, businesses, exchanges, data providers, brokers, and other technology providers to achieve their common goal of excelling in Quant & Algo trading. QuantInsti provides both paid and free services to the industry.

Free services include webinars, blogs, tutorials, and trading models, algorithmic trading workshops, events, and modules for exchanges and industry. One of the most interesting and useful resources provided by QuantInst for free is their quant & algo trading blog. You can find a great selection of high-quality articles that can be a great source of information on trading for beginners and experienced traders. 


Hacker Noon is one of the most popular blogging platforms “built for technologists to read, write, and publish”. It is an open international community of 15,000+ contributing writers publishing stories and expertise for 3,000,000+ curious and insightful monthly readers.

Hacker Noon has a relatively small number of articles on algorithmic trading, but all of them are very professionally written – 7 of them are among Hacker Noon top stories, which means that these articles were highly rated among this huge community of IT professionals. Take a look at stories with the “algotrading” tag and see for yourself. 


According to Quantpedia’s website, their mission is “to process financial academic research into a more user-friendly form to help anyone who seeks new quantitative and algorithmic trading strategy ideas”. 

A new blog post for Premium users is created once a new strategy is added into Quantpedia. Members can see all of a strategy’s characteristics and use the Screener and visualization tools to compare it to other Quantpedia strategies. All new academic research papers related to already existing Quantpedia Premium strategies are also published on their blog, but those blog posts are visible only for Premium users. Occasionally, they find academic papers related to common quantitative trading strategies. Such papers are usually described on their free blog.

Quantifiable Edges

Quantifiable Edges is a website founded by Rob Hanna, a full-time market professional since 2001. He first began publishing his market views and research in 2003. From 2003 to 2007 his column “Rob Hanna’s Putting It All Together” could be found twice a week on In 2008 Rob began Quantifiable Edges. 

This resource has been publishing quantitative research, systems, and trading ideas since 2008. Quantifiable Edges also provides unique courses for longer-time market timing and quant-based swing trading, but what you can get for free is a truly great selection of articles written by Rob Hanna himself. 

Alvarez Quant Trading

Cesar Alvarez, the founder of Alvarez Quant Trading, spent nine years as a professional market researcher for Connors Research and Cesar has been at the forefront of stock market research, having developed a number of successful trading systems now used by numerous investors and fund managers in the United States and internationally. 

Most of his posts are based on the research he is doing for his own personal trading. Check out his blog where he tests trading ideas that readers and Cesar have. The primary focus is on stocks and ETFs with a hold range of a couple of days to several months. You can get spreadsheets of the results and more. Worth mentioning is that he also posts results that did not work out. “Understanding what does not work is every bit as important as knowing what does” – Alvarez says. 

Coinbase Pro API Review

By XTRD CTO Serg Gulko

Like most people, my first impressions are based on visual appeal. Yes, I realize that it might be the wrong approach to judge a book by it’s cover, but it’s hard to beat human nature.

As part of the crypto exchange integration process at XTRD, we usually familiarize ourselves with the exchange’s provided user interface, support systems, communication channels, public documentation, and so on. I remember that the day we started working on Coinbase Pro, I posted a long and exciting speech in the internal employee group chat about my findings.

After dozens and dozens of clunky, sometimes even absurd GUIs I’ve witnessed, Coinbase Pro was like a breath of fresh air. Everything was so polished, so smooth (no, smooooooth), and worked so intuitively, that I said — “guys, that’s why Coinbase is one of most popular platforms to trade crypto. Yes, fees are high but you enjoy the process. It’s like a switchover from an old Soviet Union “Zhuguli” to Mercedes Benz. Look, they even have a FIX API!”.

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But then we started working with Conbase’s API. First impressions can be deceiving. Below is the list of things that puzzled us (and which we solved).

Your order is not yours

The FIX protocol defines a special field called ClOrdId (Client Order ID) to carry client-assigned IDs of his/her orders. The client’s OME/EMS (order/execution management system) uses these unique IDs to track each order individually for many reasons. It could be execution, reporting, accounting, or of the above.

When the server receives and accepts the client’s order, it assigns its own ID to the order (transmitted using field OrderID). This is completely reasonable because you can’t rely on a counterparty to track orders. Your system, your rules, your order IDs.

Unfortunately, in Coinbase Pro, a client’s order IDs are not really clients’. In accordance with their rules, the field ClOrdId should contain a UUID string (something like this 58d1f436–6a53–11eb-9439–0242ac130002).

Any attempts to send something different — numbers (1,2,3…), strings (my_super_order_1, cool_order_132) or any other forms of IDs will be rejected. This means that your OMS/EMS should discard the existing methodology of client side ID generation (database IDs, timestamps, random strings, and so on) and start using Coinbase Pro rules. Time to rename ClOrdId to CoinbaseClOrdId!

Wait, UUID is not that bad for ID management, there are several other exchanges that use it. Why not adopt it and stop complaining?

Because there is another surprise with ClOrdIds on Coinbase Pro! Once an order is confirmed and you received the first ExecutionReport with OrderID, you’ll never see your IDs again. Any following update attempts to extract a list of open orders or trading history — everything will contain only the Coinbase-assigned ID.

So there are challenges to solve:

  • adopt your OMS/EMS to use UUIDs or build a mapper between your native IDs and what you send to Coinbase
  • build a matching mechanism that allows identifying orders using only OrderID and links it to ClOrdIds

Needless to say, our clients simply don’t know about the twists and turns of this plot. XTRD’s FIX API is designed in a way that doesn’t limit you or creates additional obstacles to solve. Your system, your orders, your rules.

XTRD allows the assignment of any type of IDs — numbers or strings. Each ExecutionReport (if successful) contains an OrderID (ID in our system, always a number), and an exchange-assigned ID (could be anything) that can be used for cross-checks between internal and exchange systems for a binary, synergistic execution verification and audit.

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As a final word: Coinbase Pro is a fantastic product and a great exchange to trade on — it’s normal that some parts of a very complex offering have minor rough spots.

XTRD’s job is to ensure that our clients’ awareness of integration difficulties only exists from our complaints in articles!

5 Reasons Why We Need More Interconnected Crypto Exchanges

Cryptocurrency exchanges occupy a precarious position in a unique field of technology. Despite their undisputed role as fiat-to-crypto gateways that are beneficial to many people across the world, they face endemic hacking problems and distrust by core cryptocurrency proponents. Inevitably, this draws from a balancing act between conventional finance and a disruptive market — attempting to capture as much value as possible. 

But cryptocurrency exchanges aren’t going anywhere soon. 

Decentralized exchanges (DEXs) continue to tarry behind in user-friendliness and liquidity, while institutions and regulators are assuredly looking for more familiar structures like centralized exchanges to service retail clients — at least compared to their decentralized counterparts. 

With global regulatory regimes fragmented on their cryptocurrency positions, the onus has largely fallen on exchanges to take the initiative themselves to fix problems facing the industry. From South Korea to Japan, we are beginning to see the cooperation between exchanges necessary to convert regulators to the view that crypto markets can adequately mature. The result, hopefully, should be more standardization of practices, less market manipulation, and the facilitation of both liquidity and technological advances. 

Crypto exchanges are a pivotal component of pushing mainstream cryptocurrency adoption forward. And here are 5 reasons why we need more interconnected crypto exchanges. 

Compliance/Wash Trading/TransFee Mining Management 

According to Bitwise’s report on cryptocurrency trading from earlier this year, roughly 95 percent of crypto exchange volumes are fake, expounding many criticisms of the relationship between exchanges, token issuers (i.e., ICOs and IEOs), and coin rankings sites. Many smaller, obscure exchanges directly engage in wash trading and trans-fee mining to achieve a perceived increased liquidity, which ostensibly attracts projects to list more tokens, and traders to gravitate to their platform. 

Dubbed the “Dark Underbelly of Cryptocurrency Markets” by Nic Carter, such practices have not dissipated. 

Cryptocurrency markets are esoteric to the mainstream and regulators, and until exchanges take action amongst themselves, regulators are unlikely to be swayed on their legitimacy until they can prove the market is not rife with manipulation. 

Non-Custodial Assets Swaps 

Amongst the more promising developments concerning the underlying technology of cryptocurrencies is trust-minimized asset swaps, without intermediaries. Commonly referred to as “atomic swaps,” these transfers of tokens can take place seamlessly via standardized protocols intra-network (i.e., Cosmos) and inter-network with some advances such as submarine swaps with the Lightning Network. 

For exchanges, the path towards more non-custodial asset swaps is inevitable. Decentralized exchanges offer much better security because there is no inherent third-party risk, which has repeatedly made large custodial exchanges honeypot targets for hackers. 

And we are already seeing some innovation in non-custodial swaps of exchanges. 

For example, Binance’s DEX is rapidly gaining traction, and from a broader perspective, it is reflective of the sentiment that centralized exchanges need to keep pace (and capture value) from the DEX market. Additionally, firms like Ernst & Young are pioneering privacy-oriented asset swaps with protocols like Nightfall, which are enticing to major financial institutions.

Minimizing custodial risk is paramount for exchanges to remain relevant as DEX’s grow in popularity, and therefore, exchanges working on standardized, non-custodial protocol swaps should help bolster innovation in the field. 


More of a regulatory relationship than technical interconnection, self-regulatory initiatives for exchanges are a necessity. The lack of a transparent regulatory framework in many regions of the world is hindering the development of standardized security and other practices. 

Under scrutiny from regulators, several exchanges in South Korea and Japan have proposed and worked towards self-regulatory organizations amongst themselves — cracking down on market manipulation

Similarly, many prominent exchanges have joined CoinMarketCap’s (CMC) DATA Alliance, which was created to define stricter order book reporting guidelines, diminishing the ability of smaller exchanges to inflate their trading numbers if they want to remain listed on CMC’s rankings site. Many smaller initiatives, like the Blockchain Transparency Institute, also help to expose market manipulation via inflated order book numbers, adding pressure to exchanges. 

With regulation highly fragmented currently, self-regulation among exchanges could also provide the spark that ignites regulators to make more definitive guidelines. Similarly, their purview of crypto may become more friendly as they view self-regulation as a maturity marker for the broader industry. 

Facilitate DeFi & Institutional Entrance 

One of the emergent trends in crypto of 2019 is DeFi, and its broader implications on the financial sector. Exchanges have significant potential to play a pivotal role in the development of DeFi, and subsequently, institutional entrance into the market. 

For example, Coinbase is already offering Staking-as-a-Service to clients, and many smaller firms are originating out of a demand for DeFi services. BitMEX, the leading Bitcoin perp swap platform, is even planning on rolling out fixed income products for its users. 

Should larger institutions take favorable stances on the push by exchanges to incorporate DeFi services, albeit more hybrid versions than something like MakerDAO, funds could pour into the sector. There are already numerous DeFi startups spearheading some cool technology, but institutional funding would light the sector into a full-blown hotbed of technological incubation. 

Better Liquidity 

Liquidity is the ultimate goal of any exchange, and interoperability among exchanges would only serve to fuel better liquidity, which begets more liquidity. Combined with standardized, non-custodial asset swaps, and the complete entrance of institutions would likely be preceded by a confluence of self-organized and interoperable exchanges. 

But advantages wouldn’t be strictly relegated to institutions either. 

Better liquidity across a multitude of exchanges would ensure much wider access to crypto assets by the public, including in many developed parts of the world. Bitcoin’s accessibility is currently one of its weakest assurances, largely because of the inability of many people in more oppressive political and economic arenas to gain access to the legacy cryptocurrency. 


Interconnected exchanges are paramount for a swath of intercorrelated reasons. The crypto market desperately needs to mature if it wants regulators and institutions to take it more seriously. Blending self-regulation, asset swaps, reduced market manipulation, DeFi products, and better liquidity is an optimal path to reach that end. 

6 Factors Feared by Institutional Investors in Cryptocurrency

2019 has marked the entrance of institutional investors in cryptocurrency. Fidelity Digital Assets launched in May and several banks have announced plans to get involved in the space.

However, many institutions continue to wait on the sidelines. Why would they do this? 

It’s hard to ignore the fact that Bitcoin has been the best-performing asset class in the world for the majority of its existence. So why the hesitation from the traditional investment community?

Here are six factors affecting the appetite of institutional investors in cryptocurrency.

Custody Concerns

Anyone following cryptocurrency markets have seen the headlines about the latest exchange hack. At some point in the future, there will certainly be a bigger hack than the one the industry just experienced. What this leads to is a confidence crisis, especially amongst the uninformed. ‘This must mean all digital assets are insecure,’ they might reason.

Cybersecurity is an issue that’s not unique to the crypto asset class by any means. But it does have an extra sense of importance in the space because people have a hard time trusting something they don’t understand. 

While some companies have made progress toward a solution, figuring out a way to securely hold digital assets remains a primary concern among institutional investors in cryptocurrency. 

High Volatility

In general, volatility has an inverse relationship with security. Volatile assets are seen as high-risk while stable ones are seen as low-risk. Newer, small-cap stocks tend to be volatile while government bonds tend to be more stable, for example.

While exceptions do exist, this is one of those tried-and-true principles of investing that many people can’t seem to get out of their heads. Just because an asset is volatile doesn’t make it higher risk than less volatile assets, although as a general rule volatility is a good way to assess risk. 

Fiat currencies like the Turkish Lira, Argentinian Peso, and Venezuelan Bolivar were all stable for long periods of time before entering free fall. But most big investors would still rather risk losses in an asset class they know than take a stab at an asset class they don’t. 

Basic Lack of Awareness

Digital assets as a class has only existed for little more than ten years. Many have yet to see its full potential realized.

It can be difficult to comprehend the total paradigm shift that has occurred with the invention of blockchain. The implications are vast, and often overwhelming for even seasoned traders. 

This explains why a handful of the biggest traditional investors in the world are hesitant to go ‘all-in’ with cryptocurrency, for now. Some big names have been very vocal with their criticisms of Bitcoin, often relating it to some of the financial mechanics that started the 2008 financial crisis. These criticisms often demonstrate a fundamental ignorance about the technology upon which cryptocurrency is predicated – distributed ledger technology, or blockchain.

Immaturity of the Industry

Let’s face it. Trusting an asset class that’s only a decade old isn’t easy. The space has been plagued by bad actors and mishaps. And the industry as a whole has a branding problem, with negative misconceptions abounding. 

These misconceptions might be the least tangible of the six factors but also the most difficult to overcome. The problem is purely cognitive in nature. As more traditional financial players continue to educate themselves with regard to blockchain, however, this should change. 

Technological Know-How

Some traditional financial institutions have struggled to keep up with the fast-moving blockchain industry. With the smartest talent garnering an extremely high level of competition, the barrier to entry is enormous, to say the least. Some companies even attempt to circumvent the head hunting process by attempting to train their staff to learn crypto, which hasn’t proven successful for many companies. 

Most people at financial institutions probably don’t know what the term “cold storage” means, for example, and much less how to implement it. This knowledge barrier creates an inconvenience for organizations which can be intimidating, leading to further segmentation of opinions about the industry. 

Regulatory Uncertainty

The majority of the world’s most important international regulators have been more than vague in their guidance toward the crypto asset class. Some say cryptocurrency is an asset in the same way that property is, others say some coins are securities, while others claim digital assets are commodities. 

This is a nightmare scenario for institutional investors in cryptocurrency. It’s even a headache for small retail investors. 

To be fair, regulators have begun clarifying their stance toward crypto, as the industry continues to mature and increase in adoption globally. However, due to the fast evolving nature of the industry, this factor will continue to impede adoption by legacy financial investors. 

Institutional Investors in Cryptocurrency are Still Learning

What we have seen this year continues the movement towards mainstream adoption of cryptocurrency and blockchain. One day, market participants will look back on 2019 as the year it all began for institutional investors in cryptocurrency. The entrance of a few big players in the space will likely precede a gold rush to the gates. 

XTRD’s commitment to bringing many of the traditional financial instruments to the world of crypto will prove instrumental in luring in many of the legacy investment institutions to this industry. XTRD’s creation of familiar products like a FIX protocol for crypto and a Single Point of Access for traders have already attracted many hawkish investors to the market. The XTRD model will bring higher liquidity, lower fees, and combine platforms, in an effort to increase returns for traders. 

Factors like custody management, regulatory uncertainty, and cybersecurity are slowly becoming less and less of a concern. Through the new crypto instruments that XTRD is bringing to market, these apprehensions are becoming irrelevant. Given the pace of developments in the space, who can say how fast those obstacles might be overcome? 

How Institutional Traders Would Benefit from Global Crypto Exchanges

Unfortunately, although many cryptocurrency exchanges have designed extremely simple tools for onboarding retail customers, the services they provide for enterprise and institutional customers is often lacking. 

At XTRD, we design solutions for high volume cryptocurrency traders, helping those with advanced trading needs to access global crypto markets with improved security, reduced latency, and increased efficiency. 

Here, we will take a run-through of the major challenges facing advanced traders today, while looking at how some of XTRD’s upcoming products can help banks, hedge funds, and large institutional traders improve their access to crypto markets. 

More Opportunities

Since the cryptocurrency markets are notoriously volatile, and substantial price movements can occur within just seconds, it is important to employ a solution that can minimize latency in order to quickly execute orders at the desired price. 

By trading through an API, traders can minimize their security risks by limiting access permissions to exchanges, while also benefiting from improved order execution speeds—something much needed for high volume traders. 

However, with each exchange having a unique API, integration costs can become burdensome, which leads many institutional traders to integrate with only a select few cryptocurrency exchange platforms.

With the advent of FIX APIs, these issues have become a thing of the past, giving institutional and professional traders a standardized way to communicate with any compatible exchange. This also has the benefit of providing complete privacy to FIX API users as channels are typically private and secure, ensuring sensitive data is never exposed to commercial platforms. 

XTRD’s FIX API is one such product, providing one of the world’s first standard API which can be used for order execution at all crypto exchanges, giving major institutions, hedge funds, and algorithmic traders the opportunity to easily access liquidity across different exchanges. 

By using the FIX API, trading institutions of all sizes can improve the liquidity of any cryptocurrency holdings, allowing much larger orders to be executed without risking price slippage. As a result, integration costs will be significantly lower, since traders will only need to integrate the single FIX API with their existing systems to enable API trading on all supported exchange platforms. 

Reduced Risk

One of the major challenges faced by advanced traders is the inefficiency of the web interface provided by most exchange platforms. With clunky, slow, and often buggy tools slowing down the rate of order execution, and potential outages causing trading clients to miss potentially profitable opportunities, there is a great need for a robust standalone trading solution.

Thankfully, several companies have designed aggregator platforms to help institutional clients maximize their exposure to multiple exchanges without compromising on features. An example of this is the forthcoming XTRD PRO, a client-side interface that was designed to provide professional traders with robust access to crypto exchanges via XTRD’s FIX API serving as the back end.

By maintaining unfettered access to all major exchange platforms, traders will be able to capitalize on more opportunities than previously possible, all from a single streamlined user interface. 

Within XTRD PRO, users will be able to manage trades from all of their cryptocurrency exchange accounts from a single downloadable application. By massively improving efficiency and fill rates, XTRD PRO users benefit from faster trades and greater profits. 

A Final Word on Latency

Arguably, the major issue faced by high-frequency and algorithmic traders is the delay between order submission and order execution on the receiving platform—known as latency. If high enough, this latency can severely disrupt the profitability of a trade.

Not only does low latency lead to fewer failed trades, but it also ensures that traders benefit from the best rates, considering the volatility of crypto markets. Because of this, securing extremely low latency access to cryptocurrency exchanges should give high-speed traders a significant trading advantage, allowing them to execute trades based on momentary changes in market dynamics.

To address this concern, XTRD will soon begin offering colocation services, providing latency-dependent traders a VPS solution that cuts latency from an average of 150 milliseconds (1 second contains 1000 milliseconds), down to a potential 1.5 milliseconds. Combined with XTRD’s FIX API, this can yield a significant performance increase over handling cryptocurrency trading manually with connections over the internet, which are typically slow and not secure.

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3 Reasons a Single Point of Access is Hugely Beneficial for Those who Trade Cryptocurrency

Ten years into the crypto revolution and markets are still considered immature. Where traders on mainstream platforms have access to unlimited amounts of liquidity and a vast array of advanced tools to help facilitate their transactions, cryptocurrency traders still function in a sort of technological ‘stone age.’ 

If you want to trade on multiple exchanges, you have to create multiple accounts with different login credentials. Traders have to deal with separate fees and separate slippage, cutting into profits more and more. There is also the counterparty risk which gets multiplied with every exchange you interact with. 

While these problems might not bother small retail traders, it creates tremendous headaches for those looking to trade with larger sums of capital. This is one of many reasons that bigger financial players have yet to enter the cryptocurrency sector in a significant way.  

Thankfully, there is a solution coming. One which allows traders to interact with a single entity and reduce, or eliminate, the hassles and risks associated with trading across multiple exchanges.

How A Single Point of Access Improves Trading

Being able to have a single point of access (SPA) provides traders with the resources they need to function effectively and be successful. While the benefits of trading through a SPA are extensive, here we will focus on three in particular.

1. Ability to Interact with Additional Exchanges

A single point of access gives traders access to multiple exchanges. Why would anyone want such a thing?

The simplest reason is liquidity. In markets as shallow as cryptocurrency, it’s just not possible to transact with very large amounts of capital. It becomes necessary to buy/sell coins on several different exchanges simultaneously. 

Not all exchanges list all coins/tokens or all trading pairs that exist. The token you want may be absent on one exchange, listed in a BTC pair on another exchange, or possibly in a stablecoin pair such as USDC on yet another exchange. If you wanted to trade this hypothetical coin for a stablecoin using fiat, you would have to:

  1. Convert fiat to BTC,
  2. Move the BTC to the exchange with your desired coin, 
  3. Make a trade, 
  4. Move the new coin to another exchange, 
  5. Make another trade

After undergoing these five steps, in which you have racked up hefty fees (and a massive headache), you would finally have finished trading the coin you wanted in the stablecoin pair you were looking for.

2. Reduced Counterparty Risk

Trading anything on any platform comes with some kind of counterparty risk. To some extent, you always have to trust your funds in someone else’s hands for a certain length of time. This results in the possibility of something going wrong on part of the party holding your funds. 

The term “counterparty risk” refers to the risk of someone defaulting on their debt owed to you. In the case of cryptocurrency, some exchanges have mismanaged user funds in the past, resulting in traders losing most or all of their coins. The users in such cases fell victim to the counterparty risk inherent in holding coins on an exchange.

But going through the process described above multiplies counterparty risk to a large and unnecessary degree. Instead of being concerned with the potential of something going wrong at a single point of failure, you now have to endure risk at least three times over. 

3. Reduced Slippage and Fees

As if all the problems described above weren’t enough, you are also losing chunks of capital during this long and drawn out process. Every exchange you use charges its own fees, creates its own slippage (the small losses that result from large buy/sell orders being executed in multiple trades at different prices), and requires a network transaction or miner fee for moving crypto from one wallet to another. 

This can result in a trader incurring losses at the end of the day even if they make a profitable trade.

Being able to use a single point of access allows traders to keep things simple – one account, one trade, one simple and clear fee.

The Future of Crypto Trading Is About To Get Much Simpler

Multiple companies are currently developing a solution, but none has achieved industry-wide success yet. Currently, XTRD is the closest trading company to achieving a single point of access for traders. Very soon, it is likely that the industry will coalesce around a kind of cross-exchange trading mechanism that other financial markets have used for decades. This instrument will allow for improved transactionality, which can lead to not only the maturation of the industry, but to mainstream adoption of blockchain technologies.

How Institutional Investment Will Change the Crypto Asset Market

This article was originally published on

By Alexander Kravets. He is the cofounder and CEO of, a technology company that is bringing mature Wall Street technologies to the world of cryptocurrency. Before XTRD he served as Managing Director of a self clearing broker/dealer that handled 4% of the daily trading volume on Nasdaq and successfully launched Sogotrade, a retail investing platform with over 100,000 clients.

Institutional investment has long headlined as the gateway to widespread crypto adoption. Beginning with bitcoin in 2009, cryptocurrencies continue to evolve in response to investor preferences. Utility tokens, security tokens, and most recently stablecoins are all on offer in the crypto market. Regardless of the application, each of these token iterations aims to bridge the gap between digital and conventional finance.

However, despite ongoing initiatives, the timing of institutional adoption has been mostly speculative — until now. Several recent developments in the industry suggest institutional investors are poised to enter the market in 2019. Despite the prolonged bear market of 2018, many large corporations are busy laying the groundwork necessary for institutional investment. Companies like FacebookJP MorganFidelityMetLife, and IBM continue to make significant investments in blockchain initiatives.

Further, a survey conducted by Fidelity Investments found that 47% of institutional investors “appreciate that digital assets are an innovative technology play,” while 46% are attracted to their low correlation to other assets. Morgan Stanley has also pointed to an emerging awareness of crypto as an institutional investment class in recent years.

Source: Morgan Stanley — Update: Bitcoin, Cryptocurrencies and Blockchain

Although institutional adoption is on the horizon, not everyone sees it as a good thing. Let’s delve into the good and bad of institutional investment in the crypto market.

The Downside to Institutional Crypto Investment

Several stakeholders in the crypto ecosystem are resistant to the arrival of institutional investors; there are typically a few reasons for this.


When bitcoin was first launched in 2009, Satoshi Nakamoto had a specific vision for the cryptocurrency. The intent was to reduce the involvement of the state and the institutional structures of our society. In the original whitepaper, complete decentralization was championed so that all the power was in the hands of the people, not “the system.” The Satoshi faithful perceive institutional involvement as an insult to the original ideology of cryptocurrency.


The Overton window refers to the range of ideas that are permitted to be discussed in the public realm. Many argue that since the arrival of institutions in the crypto ecosystem, censorship has become prevalent on several topics. And although deleting unfavorable comments from a crypto subreddit can be attributed to those looking to protect their investment, the practice has allegedly gotten worse.


The Internet was intended to be free, open, anonymous, and decentralized. Instead, it is censored, controlled, tracked, and spied upon by governments and big tech companies. This scenario is an example of recuperation, meaning:

“…the process by which politically radical ideas and images are twisted, co-opted, absorbed, defused, incorporated, annexed and commodified within media culture and bourgeois society, and thus become interpreted through a neutralized, innocuous or more socially conventional perspective.”

Many believe that blockchain technology and cryptocurrency will be absorbed by institutional investors, dramatically altering its intended purpose.

The Benefits of Institutional Crypto Investment

Despite the arguments against institutional adoption, there are benefits for those that currently hold or intend to invest in crypto assets.

Lower Volatility

Those in support of institutional investment point to the stabilizing of crypto markets as a significant benefit. The idea is that as the demand for crypto increases, a more diverse investor pool will emerge, stabilizing markets. As the move towards stablecoins continues, institutional investors will also inherently increase their supply, further lessening potential volatility.

Source: Morgan Stanley — Update: Bitcoin, Cryptocurrencies and Blockchain

Increasing Returns

As institutional investors accumulate crypto assets, many with a finite supply, demand is expected to increase dramatically. In the long run, this increased demand and exposure will benefit early crypto adopters as prices rise substantially.

Balancing the Crypto Ecosystem

The institutional adoption of crypto assets is a complex undertaking. Although many are poised to benefit from increasing crypto demand and subsequent market exposure, several concerns remain. Those who support the founding ideology of bitcoin and other original cryptocurrencies remain leery of centralized institutions exploring the technology. And as many institutions explore blockchain and crypto, the possibility of recuperation is concerning for some.

Source: Morgan Stanley — Update: Bitcoin, Cryptocurrencies and Blockchain

As companies like JP Morgan and Facebook push forward with creating their cryptocurrencies, it’s unclear how such initiatives will affect the broader ecosystem. Many have already begun to argue that these digital tokens aren’t cryptocurrencies at all. Regardless of the semantics, it’s evident that digital currency is here to stay, and stakeholders hold diverse opinions. How will it all play out? It appears only time will tell.

CEO of XTRD participates on institutional crypto trading panel in Moscow

Alexander Kravets, CEO of XTRD, took part in an institutional crypto trading panel in Moscow hosted by multinational telecom provider Avelacom, an XTRD Partner – alongside representatives from CBOE, RJ O’Brien, Exante, Finam, and the Moscow Derivatives Exchange. He shared his thoughts on crypto industry general trends and market landscape. Here are some highlights.

For how long have you been on the crypto market? What are the differences between the time you started and now?

We began working with cryptocurrency about two years ago. We started with creating a few trading strategies for ourselves, but encountered a massive amount of technological and jurisdictional issues, from which we decided to build a business to solve these problems.

At that time a few Javascript programmers could slap together a basic trading platform, call themselves an exchange, and become millionaires 6 months later. The problem was that they had almost no knowledge of how the financial industry actually works. As a result, hundreds of exchanges were created, most of which suffered from technological problems (like a matching engine capacity of 10 orders per second max) and unable to solve basic business issues like accepting fiat to trade on their exchange.

That was combined with a bunch of odd characters promising the dawning of a new blockchain age and you get the picture.

Half of these companies already disappeared, another quarter will be gone in the next year or two. This is actually quite healthy and is in line with business Darwinism.

At this time we see increased interest in digital assets from traditional financial companies, who are beginning to “feel out” the market. The products that are being launched are more mature, and remind us of traditional equity and FX technologies. They are also supported by larger, mainstream companies like Fidelity, ICE, and in many cases have traditional VC backing. Financial incumbents are betting on the future of blockchain and digital assets.

How did these changes impact your current activity or your plans?

We are intensively working to expand our product offering as we want to establish a market niche for XTRD. Pretty soon we’ll be working Chinese hours 9-9-6 (nine to nine, 6 days a week).

XTRD provides a range of offerings for access to various crypto exchanges via FIX API, that we have built from scratch. Our server infrastructure is located in Equinix NY4 and we work closely with Avelacom in order to provide our clients the fastest, safest, and high-quality access to various digital asset liquidity points around the world.

The reality is that this turbulent formation period will come to an end sooner or later, there will be greater regulatory clarity and more defined asset classes. Our aim is to help build this ecosystem.

For example, just two years ago no one was considering centralized clearing, and today we, along with multiple other organizations, are evangelists for this idea, lobbying exchanges to join.

Is crypto market really that specific or the borders between cryptocurrency and the traditional financial instruments are fading away after the players from the traditional financial sphere came to the market?

At this time there is a difference, and it’s substantial. The digital asset space is strongly reminiscent of the FX industry and its’ initial formation. If we are talking about crypto exchanges, these are disparate points of liquidity, floating in space, that don’t really communicate with one another. They have severe infrastructure issues, such as uptime, slow matching engines, bad support, lack of safety of funds, difficulty with fiat, etc.

Luckily, the situation is gradually improving, as existing players begin to understand that they cannot continue to operate or they will not survive. Consider the “new kids on the block” for exchanges – these aren’t Javascript programmers anymore – instead, they’re generally financial technologist behind whom stand traditional financial companies. The traditional players, in turn, want to trade in the way they are used to. This means centralized clearing, FIX API, cross connection, and some kind of common ruleset.

However, we shouldn’t think that if traditional financial companies enter the digital asset space, they change it exactly to their spec. They also have to adapt. For example, clearing with stable coins and smart contracts will allow clearing to occur instantly and minimize credit risk, so that could potentially eliminate T+1 or longer settlement.

DLT [digital ledger technology] is excellent technology. It may not be the next Twitter killer, but it’s quite applicable in the financial space.

The idea of decentralization: does it play any kind of key role in further industry development?

This doesn’t really apply. To be honest, the concept of decentralization is very far removed from reality. It sounds great on paper and in theory, but in practice it doesn’t work.

Think about it – if everyone has to take custody of their own wallet, no one is really responsible on a larger scale. If you have problems, you’re on your own.

People may dislike banks and exchanges for a range of reasons, but the reality is that the services they provide have a separate value. They may be expensive now, but advances technology will lower those barriers. Competition will also play a role in lowering prices.

Do you expect the rise of new players that might be able to influence the landscape of the market?

Fidelity for custody, a 2.3 B asset manager.

Bakkt for retail participation via b/d model and clearing at Bakkt (if CFTC approval).

We see many companies that focus on lending like lending club/prosper model – Celcius, Blockfi, and some institutional ones like Seabury. This speaks to the fact that institutional appetite is to short crypto and also retail HOLDers who don’t want to sell betting against them, probably a losing battle.

New modern exchanges that are much stronger in terms of tech and compliance that will likely corner the market vs incumbents because they are supported by traditional financial players (Seed CX, an XTRD partner).

What can you recommend to the companies that are planning to try crypto trading?

We like to advise on a practical approach – try a bit and go from there.

The rules of the game in digital assets and FX differ and it’s better to discover those for yourself, using smaller sums.

The technological “backwardness” of this market is actually an advantage – the barrier of entry is low, you don’t need to spend lots of money on infrastructure to start in production – most data is publicly accessible and free, you can connect over Internet, even on wifi from your balcony.

In digital asset trading, you’ll spend a lot of time to solve problems that in theory should not exist – connection to exchanges, APIs, a bunch of varying and exchange specific formats and protocols. You can try to solve this in house – belive me, it’s a major headache to have to code for data and execution in a different spec for each individual exchange – or utilize the services of companies like ours.

If you are conducting latency arbitrage, you have a year, maybe two. Even now the top of book is generally quite thin. Exchanges are already beginning to function as LPs and aggregate liquidity, consolidate order books – this limits arbitrage opportunities between exchanges and since many people are doing latency arb, this is competitive. The fees are also still high, taker fees can be as much as 30 basis points per execution.

Next step is bigger exchanges consolidating liquidity and adding datacenter presences, creating traditional HFT arbitrage scenarios we see in equities and FX.

If you have a stable business in FX or equities, hold on to it, but don’t be afraid to experiment with these new asset classes!

REST/Ws vs FIX for crypto trading

REST/Ws vs FIX for crypto trading

By XTRD CTO Serg Gulko

First of all, I don’t want to start yet another holy war of what is good and bad. Everything below is my personal opinion. If, for some reason, you disagree with it — feel free to leave me a comment and I’ll be happy to continue the dialogue.

Our company, XTRD, provides unified FIX API to trade across multiple cryptocurrency exchanges. Since we started our journey, we’ve had a chance to work with many different APIs — REST-only, REST and Web Sockets, sometimes even FIX. Today I want to explain why I think that REST and Web Sockets isn’t the best choice for trading (with some exceptions).

Don’t get me wrong, we also use REST API in our products — this is one of the best possible ways to communicate with remote systems. Whoever used CORBA or SOAP will definitely understand me. Request and response sequences allow you to create many things. But at the same time, request and response have limits. Trading is more asynchronous than many people think. It’s not only about matching buyers with sellers, but it could also be order re-routing around the entire planet.

Taking into account complex processes, trading activities should be performed in an asynchronous fashion — send and switch to another operation — the counterparty will notify you once order changes its’ state. Therefore, the pure REST “request and response” model is not very useful. You either wait for a server response until success (or failure) or start polling (constantly ask for your order status in a loop). I’m confident that 80% of the load on cryptocurrency exchanges that have REST-only API is caused by this polling. No wonder why everything is so slow…

To solve this problem at least somehow, many exchanges started to offer notification mechanisms over Web Sockets. This is a big step forward. Instead of “destroying” exchanges with repeating “what is my order status” requests, we can simply sit and wait. Unfortunately, not all is sunny here. We discovered several things which can easily add more “fun” into trading systems developer’s lives:

  • Sometimes notifications through Web Sockets come prior to the initial REST API call being finalized. Why? REST API and Web Sockets are totally different and independent communication channels. This is similar to situation when you picked up a phone to order some food delivery, you just dialed in, took a deep breath to make an order but suddenly someone (delivery guy) knocked into your door. He probably brought what you were about to order but the cause/effect relationship is broken, which is difficult in a programmatic setting.
  • Many exchanges do not allow to assign own IDs to outgoing orders. For those who are not trading it might not sound like a big deal. But compare it for a moment with sending packages without a tracking number and with partially obscured recipient addresses. There is only one way to match your order with exchange’s response — wait for the REST API call to complete. So the counterparty is waiting (and blocking resources) while exchange come up with a response. What a waste of resources…

Mixology is good in bars but attempts to use different contexts simultaneously like REST and Web Sockets is bad by design. Luckily, certain exchanges are providing the ability to trade through Web Sockets as well as receive notifications. For example, you can do it on HitBTC (their API is so perfectly designed so I can’t imagine any better) or CEX.IO.

What does this have to with FIX? FIX is a protocol, created to do only several things in a most efficient way — to trade and to transmit financial data. Of course, with some portion of ingenuity, you could customize it to send things like images… It’s like a jet — it can drive and even float with some extent but its main purpose is to fly. Period.

FIX is asynchronous by design, with relatively strict semantics and workflow but it’s the same workflow for almost every financial institution. If you are capable to trade on LMAX or CME, then you can easily connect to Gemini or XTRD (XTRD is not an exchange, but a routing mechanism).

Despite the fact that the XTRD FIX API is running on top of the native and sometimes (… ok, many times) wonky exchanges APIs, we successfully solved the problems mentioned above. Lock-free algorithms, advanced multi-threading, and 12 years of experience plus some black magic — and our customers can enjoy a standard, familiar workflow.

FIX has a higher learning curve comparable to REST or Web Sockets but all depends on what your end goals are.