Legacy market institutions, like TD Ameritrade, continue to pile onto the cryptocurrency market with meaningful contributions, even in spite of the drastic downtrend crypto assets have undergone since the start of 2018.
Crypto, Meet ErisX
Earlier this week, on Wednesday, TD Ameritrade, a well-known brokerage firm with over $1.2 trillion worth of consumer-owned assets under management, announced that it had invested an undisclosed sum into ErisX, a crypto platform that has reportedly been in the works for months. According to the official announcement, ErisX, which is also backed by DRW, Virtu Financial, and CBOE Global markets, is slated to become a fully-regulated, US-based derivative and investment vehicle exchange that will take a focus on crypto assets.
The Block’s Frank Chaparro, widely regarded as one of the crypto’s most intrepid journalists, revealed some pertinent details about ErisX that weren’t apparent in the TD Ameritrade announcement.
Firstly, it was added that the startup’s list of backers and formal partners stretches much further than the aforementioned, as it was revealed that Susquehanna International, Digital Currency Group, Nex Opportunities, and CMT Digital, had also made contributions to the venture.
According to his exclusive report, the goal of the platform is to eventually offer spot and physically-delivered futures for Bitcoin, Bitcoin Cash, Ethereum and Litecoin, which may be a product that may appeal to both retail and institutional investors in an open market. Pending regulatory approval from American agencies, the startup is aiming for a Q2 of 2019 launch, which will hopefully see ErisX’s first spot trading product go live.
It was added, however, that the startup holds a designated markets contract (DMC), alleviating some concerns regarding the regulatory status of ErisX’s proposed futures and spot contracts.
Speaking on his aspirations for the project, while also adding a tinge of insider insight, ErisX CEO Thomas Chippas, who formerly worked as Citigroup’s head of quantitative execution, told Chaparro:
In our opinion, there is no lack of interest in building out markets for people wishing to trade digital assets and there is plenty of space for people to come in with a regulated exchange and clearing house.
Once launched, over 11 million of TD Ameritrade’s customers will gain access to ErisX, which many see as a step towards the global adoption of crypto assets and blockchain technologies. Speaking with the CNBC Fast Money panel on Thursday, Steven Quirk, executive VP of TD Ameritrade’s Trader Group, stated — “I think the appeal for us is that [ErisX has] the biggest players in the Bitcoin space from a market making standpoint… We (TD Ameritrade), as a strategic investor, have a pretty deep understanding of our 11+ million retail clients and what they look for when it comes to a product.”
Leveraging his insider expertise, Quirk, who also works with Ameritrade’s investor education department, went on to explain that investors want a way to gain exposure to crypto markets, but through a regulated entity or vehicle. Keeping that in mind, it is apparent that ErisX’s futures contract will fit that role perfectly.
This venture follows the establishment of Bakkt, a crypto-focused “scalable on-ramp for institutional, retail, and merchant investors” that has been backed by some of the world’s leading institutions, like NYSE’s parent company ICE, Microsoft, and of course, the one and only Starbucks. Since the announcement of TD Ameritrade’s involvement in ErisX, some claim that Bakkt and the new platform will likely go head-to-head, as the startups inherently have similar goals, aspirations, and plans to introduce the crypto industry to consumers worldwide.
Title Image Courtesy of Sam Valadi Via Flickr