The cryptocurrency market could be a bit congested this year.
A study by Thomson Reuters indicates that about 20% of financial institutions could start getting involved in Cryptocurrency trading during various times over the course of the year.
According to the study, a larger number of companies will want to get in Cryptocurrency trading this year within the coming three-to six months. On the other hand about 22% are likely to get in over the longer-term period beyond the next six-to-twelve months. Over 400 clients across its trading solutions Eikon, REDI and FX platforms were surveyed.
In an interview Sam Chadwick the director of strategy and innovation at Thomson Reuters, an expert in the blockchain, explained that during his postgraduate Maters at Oxford University, he stumbled upon Vitalik Buterin’s article on Ethereum while trying to find a topic for his dissertation.
Chadwick said he was then motivated to write on the effects of the blockchain on financial services. Coincidentally, Vitalik was a short distance in Switzerland and they arranged a meeting. During the meeting, Chadwick said: “We had a chat for my dissertation on how Thomson Reuters would be impacted by the blockchain and smart contracts. [Buterin] said there would be some disruption of the client base you serve today if it pans out the way we think it will. But smart contracts needed some mechanism of getting off-chain data, like weather, temperature, interest rates and prices of other world assets. That became my thesis.”
Before the recent study in January 2017, Thomson Reuters’ Chadwick questioned the firm’s institutional clients regarding Bitcoin and other Cryptocurrencies and according to Chadwick, he got “blank stares.” But the event made a turn around after Bitcoin reached its highs in December 2017.
“That was one year ago. And then coming into the end of last year into Q4, prices of Cryptocurrency assets went bananas. Bitcoin started soaring. That landing page we created for bitcoin inside Eikon moved up to be No. 2 of all the FX landing pages after the euro,” explained Chadwick.
Chadwick made no comments regarding the fact that there are rumors going on that Goldman Sachs is launching a Cryptocurrency trading platform saying: “It was a combination of the large buy-side organizations — asset managers and hedge funds — as well as some of the bank trading desks.”
He also highlights various ways trough which financial institutions could likely come on board Cryptocurrency trading. “Whether they invest in the capabilities, form partnerships or quietly white-label, we don’t know. But there are different ways they.. new product without too much heavy lifting,” said Chadwick.
Chadwick added, “One of the questions on our survey was if we were to cover Cryptocurrency pricing and trading, which ones would you be interested in? The big ones were named, but then it was interesting to see some of the altcoins that people picked. It drew me to think about whether players are thinking about creating fund offerings in which you’re not 100% to bitcoin or 50/50 bitcoin/Ethereum. But you could actually hold a portfolio of 10-20 coins that would diversify your risk given the fact that these are startups.”