Crypto becoming the new electronic Wall St.

Have you noticed that there are more and more institutional Crypto offerings that look more like traditional Wall St. offers?

 

Crypto markets are becoming more mature and like any market they require derivatives and exchanges.  One of these exciting companies is FX Exchange or “FTX” for short. FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.  FTX is backed by Alameda Research, a ~$70million AUM quantitative cryptocurrency trading firm.  Launched a few weeks ago and with a better-suited derivative product to current market, FTX already have more liquidity than OKEx!

 

What you’re seeing now is the transformation of Wall St. to a tokenized process or if you will the tokenization of assets.  It’s a slow process but in 10 years you’ll see more and more assets are tokenized.  The bench strength of FTX is strong, their team comes from well-known names like Facebook, Google, Jane Street, and others.  And they are backed by a well known name in research – Alameda Research.  But as traders we are most interested in their products – what makes them unique?  Let’s take a look at 2:

 

Innovative New Products:
1. Leveraged tokens: These tokens allow traders to put on short or leveraged positions without having to margin trade. For instance, a trader who wants to 3x short Bitcoin can simply buy a 3x short Bitcoin leveraged token on FTX. Leveraged tokens are ERC-20 and can list on any spot exchange. FTX currently offer BTC, ETH, EOS, USDT, and XRP leveraged tokens.

https://lh6.googleusercontent.com/baib_ZxPH-6zbciq4KPdzyUs0c-cBmn0OT91CD8k78vAQ_hb-5X1OTWnIikx_zYB4pytGkHpDZpE3WpqkygdqW0c9S2nO1uyfpCirnox5RpiIf5xPj9Yr4esIeyLg7FbaBxhzaGa

2. USDT Futures: USDT futures are game changers; there are many large crypto firms who desperately need some way to hedge USDT deltas given its historical volatility, and USDT futures will give it to them.

 

In fact, stable coin hedging and Crypto hedging in general is a fast growing part of the ecosystem for good reason.  Just as any economy expands, you need the financial tools and instruments to make a financial plan around it.  Just for the same reasons we saw the growth of the CME and related futures and commodities exchanges over the last 50 years, we are now seeing the rapid growth of Crypto derivatives markets.
 

One market snapshot as an example, Pre IPO.  This market is completely OTC and lacking derivatives.  Crypto is not the only game in town.  But what firms like FTX are doing they are taking the digital and making markets out of it.  It’s a highly competitive space which is driven by information, that sits on a technology stack we are all familiar with; the cloud. 

 

Users must remember that while this is Crypto not the entire business layer exists on-chain.  Business processes such as account opening, 2 factor authentication (2FA) and many others are still using traditional technology.  Crypto is just like a Symphony whereas the Blockchain is the concert hall, and the various technologies are the instruments.  The conductor is the architect or ‘systems architect’ and this is what can distinguish a good project from a bad one.  Many people believe that ‘programmers’ create things which is partially true – they do the ditch digging but are they really the engineers?  Designers and engineers design systems that can support a plethora of technologies in what they call an ‘ecosystem’ it may include Blockchain it may not.  These are some of the potential pitfalls of would-be next generation companies that users need to be aware of when evaluating a company to do business with.  And it should come as no surprise when we say ‘caveat emptor – buyer beware’

 

In the case of FTX they have all of the above and more.  They cover the 3W’s – Website, Whitepaper, and Wallet.  But they are already operational – this isn’t a hot new ICO or startup.  You can open an account and see for yourself.  They are offering products that are simply not offered at other firms.  Does this sound like a promo piece?  We are biased – it looks good and as traders we like to see as many features as possible.  If you are a Crypto trader or enthusiast, this is certainly worth checking out.  We look forward to seeing more products from this company.