Bitcoin Investment

Major Bitcoin Traders Join Forces to Lure Big Institutional Investors

Julio Gil-Pulgar · @gil_pulgar | Jul 20, 2018 | 20:00

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Bitcoin traders are gladly remarking that Bitcoin’s price trajectory has been positive for the last five consecutive days, without significant pullbacks. Now that Bitcoin’s winter seems to be over, Bitcoin trading firms are joining forces to entice big institutional investors into the vibrant cryptocurrency market.

New Price Indices for Bitcoin and Ether

For many, Bitcoin’s resiliency and its recent price surge 00 are evidence that “Bitcoin has room to move higher.” In this context, the next challenge is to attract investment from big financial institutions.

However, these institutions remain reticent to participate in the crypto market due to the lack of a regulatory framework and transparency.

An effective way of addressing this issue would be to provide investors with accurate data on actionable liquidity within the institutional crypto markets.

In this regard, trueDigital Holdings LLC, a major cryptocurrency exchange, partnered with several crypto firms to build two new price indices for the two main cryptocurrencies, Bitcoin and Ether 00. The company press release of July 19, 2018, explains:

The trueDigital reference rates, comprised of bid and offer pricing from top cryptocurrency market makers include automated anti-manipulation safeguards such as outlier detection and price banding. Robust policies surveil potential manipulation and review the contributing sources on an ongoing basis in line with the IOSCO based methodology.

When announcing the new reference rates, Business Insider reports, Sunil Hirani, CEO at trueEX Group LLC said:

Those rates, which can serve as a basis for derivative products such as futures or an exchange-traded fund, take in data from market making firms.

The firms teaming up with trueDigital in this project include XBTO Group, Circle, DV Chain, the Hehmeyer Trading Group, and Altonomy.

Genesis Global Trading, one of the largest OTC market makers of cryptocurrencies, is also participating in this effort, for example, by providing data. Its CEO, Michael Moro, is a member of Oversight Committee for the CME CF Bitcoin Pricing Products.

Hirani founded truDigital in 2018. The company is headquartered in New York and its stated purpose is “to launch a regulated, enterprise derivatives marketplace for digital assets.”

Regulated Crypto Asset Marketplace for Institutional Investors

Hirani emphasizes that financial institutions are interested in investing in the crypto market. However, he says,

The marketplace is sorely lacking the necessary foundation, infrastructure, and platforms that institutional investors have come to expect in other important markets.

Thus, with the purpose of luring big-money investors, TrueEX, an affiliate of trueDigital, announced in March 2018 the launch of a regulated derivative marketplace for digital assets.

Listed under the trueDigital brand, these contracts would initially be for Bitcoin non-deliverable forwards (NDFs) and settled in U.S. dollars.

According to Brooks Dudley, Vice President of Risk at ED&F Man Capital Markets,

NDFs on digital assets are the logical next step for institutional investors who are seeking exposure to Bitcoin and other digital currencies.

What do you think it would take to lure big financial institutions to invest in the crypto market? Let us know in the comments below.

Images courtesy of Pixabay, trueDigital, trueEx, Shutterstock