Genesis Trading, which claims to be the first broker-dealer specializing in digital currencies, launched Thursday amid reports of increasing institutional interest in bitcoin.
✎ First? No. Other firms are already doing this. Why does everyone keep calling themselves first? First of all, who cares? Secondly, the claims continue to be false. This is not the first broker-dealer.
The predominant cryptocurrency has seen its price slide about $60 over the past month, but the (active) community surrounding the technology continues to tout major corporations' and financial firms' entrance into the ecosystem in ever greater numbers. Against this backdrop, Genesis officially launched to help institutional investors buy and sell bitcoin and other digital currencies.
The new firm is a spin-off of the trading unit from alternative investment firm SecondMarket—which had already done most of its work with bitcoin—but Genesis CEO Brendan O'Connor said the stand-alone entity signified an important step for the marketplace.
"Our goal is to become the partner of choice for large institutional buyers and sellers who are beginning to recognize the economic potential of digital currency," he said in a press release announcing the firm.
Those new partnerships would come from the likes of hedge funds, alternative asset fund managers and other trading firms, O'Connor told CNBC.
While the firm's weekly volume as part of SecondMarket was between $3 million and $5 million worth of bitcoin, O'Conner said the firm has processed several individual orders worth more than $15 million.
In a relatively nonliquid market like bitcoin—which also has a fragment system of exchanges—handling such a bulk order without drastically affecting market prices requires some skill.
Bitcoin already boasts several retail-focused trading platforms, but Genesis is seeking to control the institutional trading space, O'Connor explained.
Genesis hopes that rebranding as its own entity will help the firm gain new clients, he added.
✎ AH HA! This is a re-branding. Now it makes sense. So basically they are taking what is already there, and calling it something else. Got it.
Although proponents tout bitcoin as something between the future of global exchange and a useful means of value transfer, many criticize its price volatility and the lack of a sophisticated ecosystem. But as banks and companies continue to adopt the technology for various purposes, those two complaints may dissipate, experts say.
Genesis will be a division of SecondMarket, which is already regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, according to a press release.
✎ So here's the big story, there's no big story. SecondMarket's Bitcoin desk has been around for a while, and they are re-branding it. Why? Likely to get some attention, which seeing as this was brought to our attention by CNBC, has worked. SecondMarket is a good service, and it'll continue to be a good service as Genesis, we hope, but this is nothing new.
There is one issue however, one that needs to change in this industry, and that's the misunderstand, that anything called "broker", is bad. This word has become synonymous with "scam", and that needs to change, because there is a place in the industry for brokers, and a need for them as well. However, just because someone calls themselves a broker doesn't make it so. They should, at very least, be an actual company, and registered with FinCEN, all things you can easily look up online, and any reputable broker is not going to have any problem giving you this information upon request.
Good luck to SecondMarket and it's new divisional re-branded bitcoin desk, Genesis.
❖ Originally Published "Genesis Trading Launches as First Broker-Dealer Specializing in Digital Currency Trading" ❖
• ❖ • Original Story by Gertrude Chavez-Dreyfuss ❖ ✎Commentary by dinbits • ❖ •
• ❖ • Original Story by Gertrude Chavez-Dreyfuss ❖ ✎Commentary by dinbits • ❖ •
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