Bitcoin drawing world’s fastest traders
Five of the biggest electronic traders in the world are already trading bitcoin
Electronic-trading firms that have already transformed markets from stocks to foreign exchange to futures are diving into bitcoin and other cryptocurrencies.
Five of the biggest electronic traders in the world are already trading bitcoin. Jump Trading LLC, Tower Research Capital LLC and Hudson River Trading are in the market, according to people familiar with the matter, along with Susquehanna International Group LLP. DRW Holdings LLC has been trading digital currencies since 2014, giving it a head start on competitors.
“What’s surprising me is how polarising bitcoin is,” said Bobby Cho, head of over-the-counter trading at Cumberland, a division of DRW. “Everyone has a viewpoint on bitcoin, whereas with other asset classes you either care or you don’t care.”
Cumberland mainly trades bitcoin and ethereum, but also transacts in zcash, bitcoin cash, ethereum classic and monero. Cumberland specialises in over-the-counter trading, High-speed firms have remade virtually every other electronic market, turning transactions over to algorithms and measuring market moves in milliseconds. But low volatility and trading volumes have eroded profits, pushing them to look for new opportunities. Bitcoin, which has huge price swings, rose to a new high above $8,000 (Dh29,384) on Monday. And with CME Group Inc and Cboe Global Markets Inc poised to offer bitcoin futures contracts, it will get easier for pros to place bets, either on gains or losses. helping institutions and individuals buy or sell large amounts of cryptocurrencies with a minimum trade size of $100,000. It also does algorithmic and electronic trading on digital-currency exchanges.
DRW crypto arm
The crypto arm of Chicagobased DRW is extending its reach. Cumberland has counterparties in more than 35 different countries. It opened a desk in Singapore this week, adding to its locations in Chicago and London. Cumberland has about 15 employees in total, with more hiring on the way. Cho declined to comment on the division’s financials.
Jump has a team of more than 10 people focused on bitcoin trading, according to a person familiar with the matter. Susquehanna called itself an “active participant” in spot bitcoin trading, in a letter to regulators advocating an exchange-traded fund based on bitcoin, the Winklevoss Bitcoin Trust, which was rejected in March.
DV Trading LLC, a Chicagobased proprietary firm, trades about a dozen cryptocurrencies on exchanges, and trades bitcoin and monero over-thecounter. About 10 people work in the one-year-old division, known as DV Chain.
GTS Securities LLC, Virtu Financial Inc and HC Technologies are among the electronic traders sizing up opportunities, without jumping into the market just yet, according to people familiar with the matter.
Virtu is considering making markets in bitcoin futures on CME and Cboe, according to a person familiar with the firm’s plans.
Hedge funds are looking at cryptocurrency trading too, albeit with some trepidation.
Still, for high-speed traders, it may be impossible to ignore. (Dh29,384)