SFOX Unveils Hedge Fund-Orientated Crypto Platform
Posted by Colin Lambert. Last updated: September 16, 2021
Digital asset prime broker San Francisco Open Exchange (SFOX) has launched what it claims is “the first-ever cryptocurrency trading product built specifically for hedge funds and asset managers that will provide capabilities previously only accessible by the market’s largest firms”.
SFOX says the new platform will allow hedge funds to trade “at scale” into an aggregated liquidity pool, with execution algorithms, treasury management workflow, a trade analytics package and “flexible” settlement.
“This first of its kind crypto trading platform is the right product at the right time as institutions of all kinds are rapidly transitioning to investing in digital currencies,” claims Chamath Palihapitiya, founder and CEO of Social Capital, an investor in SFOX. “The technical superiority and unmatched cryptocurrency liquidity at SFOX will bring the hedge fund industry the trading, reporting and compliance services institutions need to embrace cryptocurrency as a new asset class.”
The exchange claims that its aggregated liquidity pool across exchanges, OTC brokers and market makers, means a $50 million trade in bitcoin would execute in milliseconds “without moving the market”. While it is a bold claim perhaps that a larger trade will not move the market – surely this is dictated by market conditions – the growing interest in aggregation, Broctagon also announced an aggregated crypto liquidity pool this week, is yet another signal that the crypto world is following FX. Encouragingly for the providers of aggregation in crypto markets, the model has proved extremely popular with clients in FX markets.
Equally, the roll out of what SFOX says is “more than a dozen” order types, will be popular in the hedge fund world, as noted by Jackson Finio, head of product at SFOX, who says, “As a former hedge fund manager, I can say that the platform we are introducing today is a total game-changer for funds that are either in crypto today or just beginning to embrace crypto trading. Hedge fund managers can focus on what they do best, trading, without having to worry about execution, scalability, capital efficiency or any of their back-office reporting and operational requirements.”
The exchange is also rolling out TCA tools which users are able to access free, it says. “We’ve built a platform that gives any hedge fund access to all the same tools and resources previously only accessible and available to the most well-resourced trading firms in the world and at no to low cost,” says Akbar Thobhani, CEO and co-founder of SFOX. “We know that running a fund is hard. When a market and regulatory environment are already fragmented and constantly changing, it makes running a crypto fund even harder. We want to be an ally to every hedge fund embracing cryptocurrency investing and trading.”