Trading bitcoin is about to get a whole lot easier

Kaja Whitehouse April 30, 2015 5:23 pm

Wall Street’s ability to trade bitcoin could get easier in the coming weeks thanks to plans by software company AlphaPoint to connect potentially dozens of bitcoin exchanges to a single network.

At a bitcoin conference in New York City on Wednesday, Joe Ventura, AlphaPoint’s founder, revealed plans for a service “that will allow institutions to open one account and get access to 20 exchanges through a router.”

The final product, which is expected to be rolled out in beta in roughly one month, will be geared toward large traders, like hedge funds and proprietary traders, Ventura said.

AlphaPoint is a technology company that powers roughly 20 bitcoin exchanges, or companies that allow customers to trade dollars or other currency for digital coins. Its customers include Bitfinex, a well-known exchange that handles roughly 20% of total bitcoin trading volume, according to Bitcoincharts.com. Bitfinex also powers 37% of bitcoin trading in US dollars, according to Bitcoincharts.com.

In order to make the service work, AlphaPoint has partnered with a company that will act as the bitcoin clearinghouse, AlphaPoint’s CEO Vadim Telyatnikov said in an interview.

The clearinghouse, who Telyatnikov declined to name, will be the single contact point for traders, responsible for vetting exchange partners and assuming counter-party risk, Telyatnikov said.

“Instead of connecting to each individual exchange one at a time, they can connect to one” and still “trade bitcoin across a big percentage of the industry,” Telyatnikov said.

Although the details are still murky, Marco Santori of the Bitcoin Foundation said such a platform could go a long way to attracting more large, institutional investors to the cyber currency.

“The exchange landscape has been pretty fragmented,” Santori said, which has made it difficult to attract Wall Streeters eager to get both the best price and the greatest liquidity. A common order book could simultaneously enhance liquidity and ease concerns over pricing, he said.

Of course, Wall Streeters will want to feel comfortable with the clearinghouse partner, and that information won’t be forthcoming for at least a month.

In the meantime, other bitcoin companies seeking to serve Wall Street’s demands for large and often complex orders include Coinsetter and itBit, which recently relocated some of its operations to New York from Singapore.

Via:http://americasmarkets.usatoday.com/2015/04/30/trading-bitcoin-is-about-to-get-a-whole-lot-easier/

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