Increasing Presence Of High Frequency Trading In Crypto

Source: Mondo Visione 2020-07-06

Bitcoin’s 30-day volatility has fallen to 27.6% over the past 30 days, according to data from blockchain analytics firm intoTheBlock. "The cryptocurrency markets continue to stay eerily calm as volatility drops and traders continue to expect a big move," wrote Zack Voell in yesterday's market report for Coindesk. The prolonged period of low volatility price consolidation in bitcoin that we’ve witnessed in recent months is a result of an increasing presence of HFT firms in crypto in recent months as Bitcoin demonstrates increasing maturity as an asset class, according to James Banister, CEO, Market Synergy, a Zug-based infrastructure provider.

“From Jump to DRW, a lot of them [HFT firms] are diving in headfirst because of a lack of opportunities in the traditional high frequency, low latency trading,” said Frank Chaparro, News Director at The Block in a recent episode of The Sccop with Tarun Chitru, founder and CEO of Gauntlet. Chitru said his simulation platform for crypto networks was populated by former participants in conventional HFT markets who were drawn to new opportunities in the digital space.

As a hub for HFT in crypto, Bitfinex is providing a host of proximity hosting services to meet this growing demand. Bitfinex has partnered with Market Synergy to offer institutional standard cryptocurrency connectivity. HFT firms seeking exposure to crypto can obtain secure connectivity via a FIX feed or ISP link to Bitfinex’s digital asset gateway.

Between 80 percent and 90 percent of volume on Bitfinex is now generated by HFT firms.

“In crypto, we are back to the old days of HFT before it became the zero-sum game that it has become today,” said Paolo Ardoino, CTO at Bitfinex. “In crypto HFT firms can make a lot of money deploying relatively straightforward plays, such as cross-exchange arbitrage and exploiting the spread between one exchange and another.”

Bitcoin

Increasing Presence Of High Frequency Trading In Crypto

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