NCFX Seeks 24/7 FX Data from Crypto Exchange Data

New Change FX has launched a new class of FX data, the NCFX 24×7 FX from Crypto Feed, which seeks to provide insight into currency pricing when traditional markets are closed via API of on 70+ blockchains via the firm’s partnership with Chainlink.

FX markets typically open the week at 5am Sydney time on a cautious note, thanks largely to low liquidity, however if the market is coming off an event at the weekend demand can see markets overreact – a data source indicating where markets should be, based upon trading in crypto markets, could be helpful. Equally, as Paul Lambert, CEO of NCFX writes in introducing the new feed, there are a host of “dark” periods in restricted NDF markets in which “even partial information could confer a meaningful advantage”.

Lambert adds that historically, that advantage was derived from cross-market correlation models. “While occasionally insightful, these approaches were inherently unstable and limited in reliability,” he writes. “Yet in the absence of continuous price signals, they remained one of the few available sources of informational edge.”  

The new feed will cover 14 fiat currencies and aggregates prices across multiple cross-currency routing paths, from which NCFX constructs a mid-rate. It also maintains granular transparency into the effective rates implied by each individual route.   

Whilst stressing, “We would be the first to say our data is new and that one swallow doesn’t make a summer,” NCFX offers insight into a recent event weekend events and their impact on USD/JPY from 23-25 January. The fiat and crypto feeds trade largely in sequence during a dollar decline (the crypto feed is typically slightly higher) on Friday in New York, but interestingly the crypto feed not only trades steady at lower levels over the weekend, it dips into the Monday fiat open to kick off the new week some 50 points lower. The two feeds then trade in unison as fiat markets open and “actual” data feeds resume.

“Our initial analysis of our new dataset suggests some compelling insights,” Lambert writes. “During overlapping trading hours, we observe insights from considering the magnitude and stability – or, in some cases, instability – of the basis between the traditional fiat FX markets and their digital counterparts.

“Over weekends, pricing in digital markets can at least at times provide empirical evidence that appears to inform expectations around fiat market reopening levels,” he continues. “More data is needed to confirm these conclusions, but this avenue of investigation looks promising.”