Talking Bitcoins, Brokers, Trading, and Apple Pay at the Forex Magnates London Summit

Last week our parent brand Forex Magnates hosted its annual London Summit. The two day event brought together industry professionals from the foreign exchange (FX) market to network and conduct business, discuss the present and future, and hopefully have a great time.

Although the focus was on FX, the bitcoins and cryptocurrency sector were quite present during the event. Below is a review of some of the notable topic and products discussed.

Customized bitcoin products for brokers

Written about last week, among presenters at the startup competition was Exgate, a provider of an end to end solution for brokers to offer bitcoin trading to their customers. As noted last week, a few of the innovative features included bitcoin wallet integration to allow users to deposit directly to their trading account without funds processed by a third party processor. Also being offered was a turnkey front end white label trading solution using MetaTrader 4 as well as back office risk management tools.

Exgate represented what you could call a graduation of sorts for bitcoin into the FX industry where the product was being customized specifically to meet the trading standards already in place. This trend is also being seen elsewhere with major bitcoin exchanges launching open APIs to allow platforms to aggregate Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term from multiple venues. One of the problems that has plagued bitcoin adoption among existing traders has been the fractured market and difficulties involved with trading on multiple exchanges. Therefore, with more and more bitcoin related firms adapting their liquidity to fit standards that are in place within the trading community, it should reduce friction of cross exchange trading.

Financial firms warming up to the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term

Representing the bitcoin sector in the FinTech panel was Tom Robinson of UK based Elliptic. When asked about dialogue with financial firms and the opportunities they were seeing with bitcoin, Robinson answered that he was seeing financial firms take an interest in blockchain technology; specifically how it could add efficiency and reduce their costs of doing business.

This view was shared by attendees of which several were involved with bitcoin related startups and asset management firms trading bitcoins. In discussions with attendees they cited an opportunity in payment and trading products that utilized elements of cryptocurrency technology but also were connected with mainstream financial networks to leverage the community of possible users.

Apple Pay – Bitcoin Competitor or Ally?

One of the most interesting quotes of the summit was from Sarel Tal, CEO of AlgoCharge during the Technology Innovations in FX panel. Answering whether Apple Pay was a product that would become relevant to the online trading industry, Tal explained that in his view, what was notable about Apple Pay wasn’t the technology but that Apple was integrating their product within existing credit card payment networks with better rates to merchants. Using their fingerprint identification technology on new iPhones and iPads, credit card fraud is anticipated to be greatly reduced using Apple Pay. As a result, credit card firms are willing to charge lower fees for transactions using the Apple Pay.

In relation to bitcoins, Apple Pay can be viewed as a competitor as strong growth of user adoption among customers and merchants would be expected to reduce overall charges incurred in both online and brick and mortar transactions; thus limiting the need for more efficient alternatives to credit cards. Returning back to the forex industry, Tal’s view was that he forecasts the advantages of Apple Pay to lead it to be adopted by a wider range of industries in the future and we are probably a year or two away of seeing it as a funding option for trading accounts.