Former Tradefy executives Brandon Mulvihill and Anthony Mazares have launched a new high-speed crypto trading firm that can complete trades in under 20 microseconds.
The new firm, CROSSx, will initially offer institutional investors faster matching of buy and sell orders than a traditional exchange. Upon launch, the trading venue will offer spot trading with plans for derivatives trading expected later.
CROSSx Launch Delayed by Crypto Winter
Mulvihill and Mazzarese expect low latency to be a selling point of their new venture as crypto markets mature. The firm will run its trading engine from a physical data center in London rather than the cloud to reduce latency. Both the executives formerly worked for Jefferies Financial Group.
The founders said that the crypto winter delayed the launch of CROSSx, as it took more time to conduct investor due diligence. CROSSx’s investors included traditional quant trading venue Two Sigma and crypto firm Wintermute. These firms and others invested more than $6 million during CROSSx’s seed funding round.
High-frequency trading firms execute trades through algorithms that take advantage of small differences in price gaps. These algorithms typically execute in seconds or less, potentially making a profit for traders each time they are executed.
Traders can employ high-frequency strategies to take advantage of price differences between cryptocurrencies on different exchanges. This way of trading is called arbitrage trading.
According to its website, the Gemini exchange, founded by the Winklevoss twins, offers Gemini Active Trader that trades in microseconds.
Co-Founder of Dexterity Capital Says High Trading Speed Will Win the Race
Last year, Dexterity Capital’s Michael Safai said that institutional high-frequency trading activity was on the rise in the race to win the business.
“And while we didn’t think too much about it in the past because HFT didn’t matter, with the big guys, we have to think about it now. We have to think about our internal latency. So we’re at the beginning of this arms race to be faster, to be smarter, to actually win,” he told the What Goes Up podcast.
He added that cryptocurrencies started tracking equities last year as institutions used similar strategies for equities and crypto.
“With the coming of the institutions, they are playing by the rules they have always followed… As the institutions have come, they are bringing the strategies that they follow in the mainstream markets, equity markets and FX. So part of what we’re seeing is that as equities go down, bitcoin goes down and they stick together. And this is because similar strategies are being implemented by the big players in the institutional world in both the asset classes,” he observed.
In other exchange news, Bitstamp announced the launch of its Bitstamp-as-a-Service for institutions in the Asia-Pacific region.
Using Bitstamp’s Exchange, Exchange Plus and Exchange Full service tiers, institutions can fast-track onboarding through plug-and-play know-your-customer and anti-money laundering modules.
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