Professional Chicago Traders Serious About Crypto Even As Market Dwindles

After years of dipping into cryptocurrency markets, biding their time and preparing strategies, Chicago trading firms are getting serious about trading digital assets, reports the preeminent London-based financial paper the Financial Times (FT).

Several professional Chicago trading firms have entered the crypto-asset fray in a serious way, dedicating whole teams and desks to trading the 10-15 cryptoassets with the most liquidity (higher trading volume). These firms are “proprietary”, meaning they trade with their own funds rather than clients’ funds. Some of the desks have opened multiple locations around the world, adapting to the 24/7 demands of the crypto industry.

This heavy entrance into crypto has been occurring slowly for some time. Not only developing strategies and acclimating to the market, these trading houses had also been scooping up the sort of easy arbitrage opportunities characteristic of a young market: “There was money on the table and you could just pick it up”, but now “[y]ou can tell more professional traders are in the space”, according to a trader a DV Chain.

The firms, enjoying the cozy attitude toward crypto in Chicago, are in it for the long haul when it comes to digital assets. The head of trading for Cumberland avowed that “[t]he bottom line for us is this isn’t a one-year type experience. Even though the environment might be lower volume, we see a bigger picture down the line”. The firms have employed experienced platform and API companies, such as Trading Technologies, to set up their platforms and trading desks.

Not everyone is onboard yet, however, with some big firms still wary of the lack of maturity of asset-handling and liquidity between exchanges, non-problems in the traditional financial world. “Trading isn’t as much the issue with crypto. It’s more security as well as clearing [....] [t]hose two areas are really in their infancy”, explained a partner from HCTech, a forex trading firm.

Several projects in the crypto space are hard at work building exchange-linking liquidity platforms, for both centralized and decentralized -- and even hybrid -- platform models.

Ripple’s Success as a Payment Company May Not Benefit XRP, Says Pompliano

Michael LaVere
  • Morgan Creek Digital co-founder Anthony "Pomp" Pompliano is a strong supporter of Ripple as a payment protocol company. 
  • Pomp remains unconvinced whether Ripple's success will ultimately benefit XRP as an asset for investment. 

Morgan Creek Digital co-founder Anthony “Pomp” Pompliano believes that Ripple’s success as a payment protocol may not benefit XRP in the long run. 

Speaking on the latest episode of The Pomp Podcast, Pompliano outlined his reasons for being a fan of Ripple. According to Pomp, Ripple excels as a blockchain-based payment company that has managed to forge relationships with banks and financial services across the globe. 

However, Pompliano remains unconvinced of whether Ripple’s overall success will translate into benefits for XRP. 

He said,

What I don’t understand, and I think where I choose to not engage on the XRP side, is I don’t understand why people are buying it, speculating on future price movements.

Pomp explained that he saw the advantages of using XRP in the Ripple ecosystem, but was skeptical of the cryptoasset for investment. 

He said,

To me, if Ripple is successful, that doesn’t mean XRP has to be successful.

Pomp continued, saying that if you separate XRP and Ripple, the latter’s ultimate goal is to build better software for banks. He called Ripple’s mission a “no-brainer,” “venture capital bet” and admitted to being jealous of missing out on investing in Ripple’s seed round. 

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