TradeStation President John Bartleman
Despite the decline in the value of the leading cryptocurrencies and growing security concerns about digital tokens in general, TradeStation, the Plantation, Florida-based online trading company, is gearing up to provide cryptocurrency trading to its customers.
The product is expected to go live in the second quarter and aims to address what it sees as a big problem in the current cryptocurrency trading ecosystem: a lack of liquidity necessary for institutional players to get involved.
“There is more institutional appetite for digital assets,” said TradeStation president John Bartleman. “A lot of these brokers and exchanges have formed liquidity pools that are too disjointed for larger customers or institutional traders. We can provide a great solution for the higher end. ”
As it stands now, cryptocurrency investors looking to purchase a lot of digital tokens have to go off exchanges to transact with an over-the-counter desk, which could open them up to higher fees. Another option is to open accounts at a number of brokers and exchanges to get access to enough liquidity, which is not only costly but can be time-consuming. Bartleman said TradeStation aims to have enough liquidity to enable traders to conduct all their transactions at one place. To meet that end, he said TradeStation is partnering with the exchanges and liquidity providers to provide deeper liquidity pools that aren’t disjointed. Bartleman noted that the cryptocurrency trading space is evolving and that while exchanges and brokers have dominated the first wave, a platform that can connect it all together will be welcome.
“We are focused on the client relationship,” said the TradeStation executive. “We want to provide the best experience for customers. We don't have to manage every aspect,” referring to those brokers and or exchanges that have embraced a go-it-alone mentality when it comes to cryptocurrency trading.
Leveling The Playing Field In The Fight To End Human Trafficking
TradeStation has been paving the way to offer cryptocurrency trading to its clients for some time now. Last year it formed a subsidiary dubbed TradeStation Crypto and when CBOE Word Markets and CME CME Group launched their bitcoin futures in the early part of 2018 it was one of the first brokers to offer it to its customers. It was also among the first in its industry to provide customers with access to real-time market data in its trading analysis platform for Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
The online brokerage is currently working out the details of the new product offering including which digital tokens it will provide trading for. Bartleman said it will likely include the top four or five digital tokens. Customers will be able to open an account and fund it with cash and if they want to trade cryptocurrencies they can do so out of the cash. Customers, as a result, will be able to easily move in and out of the service via a digital wallet that TradeStation will manage. “We believe investors and traders are seeking ways to access and trade cryptocurrency products similar to the way they trade traditional capital markets – and through a trusted and familiar brand and company,” Bartleman said in prepared remarks. “Our focus will be to provide the tools and services that serious traders require to trade across multiple asset classes, including crypto.”
The move on the part of TradeStation comes at a precarious time for the cryptocurrency marketplace. This past weekend bitcoin, the leading digital token, fell below $3,500, a far cry from the days when it was nearing $20,000 a token. Concerns are mounting that the digital token marketplace is susceptible to so-called 51% Attacks, in which hackers can make changes to the blockchain. The prices of the leading digital currencies recouped some of the weekend losses but the sell-off underscores the volatility in the marketplace.
It is something that may be bad news for retail investors but could mark a big entry point for institutions. “The correction in the price needed to happen for a lot of the players like us to build out a real solution,” said Bartleman.
By Donna Fuscaldo