A survey from Thomson Reuters revealed that cryptocurrency trading by financial firms could increase in 2018. The survey was conducted among 400 of the firm’s clients, with 20% indicating that they are considering trading cryptocurrencies over the next 3-12 months. In addition to this prediction, Goldman Sachs recently launched a cryptocurrency trading desk. A number of smaller banks, asset managers and midsize family offices in Europe and Asia have also started investing client money into the crypto market.
However, the lack of trusted sources of trade data pose a challenge for institutional investors and financial firms. According to crypto investor and Crypto Finance Group Board Member, Marc Bernegger, investors are in need of trusted sources when evaluating the crypto asset market. “Relying on the existing crypto order books and trade data is simply not enough,” Bernegger told me.
In order to provide trading professionals with a full view of the cryptocurrency market, Thomas Reuters has formed a strategic partnership with CryptoCompare, the global cryptocurrency market data aggregator. In addition to Thomson Reuters using sentiment data to track trading insights for the top 100 cryptocurrencies, CryptoCompare will now integrate order book and trade data for 50 cryptocurrencies sourced from a wide variety of trusted exchanges into Thomson Reuters financial desktop platform, Eikon. This will provide users with reliable insights into the crypto asset market as a whole, enabling the prediction of price movements with a high degree of probability.
As the digital asset markets mature, we see a fast-growing demand from the institutional investor community for comprehensive, real-time and global market data, which can be trusted as the basis for investment decisions, said Charles Hayter, CEO and Founder of CryptoCompare. We are excited to enter into this partnership with Thomson Reuters, as we have always sought to provide transparency to this market. This partnership provides a great opportunity for the institutional investor community to access not only our data, but also to benefit from our experience and insight.
Specific benefits for Eikon users include the ability to view real-time data for actively trading coins, which will help identify the specific buy and sell opportunities. The CryptoCompare data in Eikon also appears in the data feeds of Thomson Reuter’s Elektron product, allowing users to view cryptocurrency prices alongside the same feeds showing equity prices from Nasdaq. This will help expand investors’ digital asset portfolios, influencing profitable investment decisions within the cryptocurrency market.
Despite the decline in the price of many of the leading cryptocurrencies during 2018, we continue to see increasing demand from our customers for pricing coverage of the major names. The partnership with CryptoCompare puts pricing data for this emerging market alongside other asset classes, giving our customers a more comprehensive, holistic trading view in Eikon, said Sam Chadwick, Director of Strategy in Innovation and Blockchain at Thomson Reuters.
Educating Investors Early On
At a granular level, CryptoCompare produces cryptocurrency trade data, order book data, block explorer data and social data to help investors better understand the cryptocurrency market. Yet Thomson Reuters also views this newly formed partnership to be beneficial in terms of educating clients.
At the moment, the majority of the crypto movement is focused on the venture capital space. But we are also starting to see more evolved organizations other than startups using smart contracts and distributed ledger technology to raise capital. This is moving the scale into the private equity space, Chadwick told me. The best private equity firms are now taking large positions when it comes to crypto assets. One of our main goals in exploring this domain is to educate our clients on how this space works.
Ultimately, the partnership with CryptoCompare is the first step in a much larger scenario for Thomson Reuters. Chadwick notes that this will eventually open doors for private equity firms and wealth managers to become very much involved in the crypto space.
“Progressing in this space allows us to educate investors on how to incorporate tokenized assets in their portfolios, alongside a live streaming feed on a decentralized or centralized exchange. It’s certainly worth operating in this space early on to help our business leads move forward,” Chadick said.