Derek Urben didn’t look the least bit nervous.
As head of business development at Coinigy, he was in Chicago looking to break into the lucrative space of institutions interested in crypto trading, data and infrastructure. He wants to connect every broker, hedge fund and institutional player he can find to its pipeline of crypto markets around the world. Oh, and he had final exams at the University of Wisconsin-Milwaukee the next day too.
If you met the tall, polite and whip-smart 21-year-old, you’d think, “this guy’s got a great future in the crypto or traditional markets” – until he starts talking. And then you quickly figure out he is the future right here and now.
Founded in 2014 by Robert Borden and William Kehl, Milwaukee-based Coinigy is looking to take its crypto trading software and four years of market data from 45 different exchanges and distribute it individuals and institutional players in the market. For those not aware of just how much crypto data that is, Coinigy believes it is one the largest sources of such information in the world. Couple that with a trading platform that provides access to crypto markets from a single account and Coinigy believes it has what active traders and institutions are looking for in the crypto markets.
For Coinigy customers, this is no small feat. Trading across multiple platforms can cause enormous accounting and trade monitoring headaches. Aggregating these accounts, and offering a new mobile version of the service, is another selling point.
Coinigy believes it is largely ahead of the pack, building APIs designed for institutional players like hedge funds, proprietary trading firms, other institutions in the crypto space and perhaps brokers as well.
Urben admits the broader institutional push into this space has created more competition, but he believes the company’s experience in these markets, which dates back to the now infamous Mt. Gox days, has given the firm an edge about what works and what doesn’t when it comes to connectivity, execution and data.
“In the last six months, we have seen this market open up,” Urben said. “And there are lots of portfolio aggregators. But there are very few that do all three like us.”
As for the always debated and discussed future for the crypto markets, Urben said there are some interesting technology advances that may change the face of these markets going forward. One is the push toward decentralized crypto marketplaces, which allow for bilateral trading and may be safer than the centralized platforms commonly used today.
There are also advances in transaction speeds. Urben said so-called lightning networks for crypto currencies may be the jump that institutions require for efficient arbitrage trades across markets. Current crypto pair trading between two separate exchanges can take up to 10 minutes. (Yes, you read that right.) Lightning networks are still in the early stages but they could speed up such transactions, not to mention add a new layer of functionality, making transference of crypto for retail purchases much more practical and potentially much cheaper. Research from Blockstream released at the Consensus 2018 event in New York last month estimated that a bitcoin “lightning channel” can process around 500 transactions per second, and that multiple bitcoin lightning channels could top the capacity of other crypto currencies and capacity of credit card processors like Visa.
All of these developments mean that firms with strong experience in the current crypto market infrastructure may also have an advantage in the next generation of exchanges. Urben believes Coinigy is one of them.