Coinsetter Sweetens Pot for Market Makers, Offering 10% Company Equity

In August we reported that Coinsetter had become FIX 4.4 API compliant, the first such Bitcoin exchange to provide data messaging connection to its platform using the financial industry standard protocol. Since its founding, Coinsetter has had a goal to provide a Bitcoin platform that would appeal to the financial industry in terms of user interface look and feel, as well as functionality. Adding FIX 4.4 compatibility was part of that goal as it provided connectivity for existing advanced platforms that offer high-frequency automated trading and market-making features.

Expanding incentives to attract institutional financial firms on their platform, Coinsetter announced today that it is offering 10% in company equity to professional market makers who provide Liquidity on the Bitcoin exchange. The program is similar to that of electronic trading platforms for equities and foreign exchange trading where market makers are provided equity, or offered attractive rates to invest in the platform in exchange for liquidity. The equity model provides incentives for market- making firms to promote the exchange and price tight trading spreads to help the platform become competitive and valuable over the long run.

To be eligible for the program, market makers will be required to place trades using Coinsetter’s FIX 4.4 API. In addition, they will need to maintain at least $300,000 of liquidity on the exchange’s order book. The amount of the equity reward allocation will also be tied to volumes executed from quotes linked to the market maker.

Overall, the focus on professional traders has begun to reap rewards. According to Coinsetter, the platform is one of the largest US-based Bitcoin exchanges by trading volumes, over 4,100 BTC traded during the most current 24 hour period.

Answering on how many market makers are currently connected to the platform, Coinsetter CEO, Jaron Lukasiewicz, stated to Forex Magnates, “We have at least 5 market makers in varying levels of developing to our APIs, some of them via FIX.” In terms of how many market makers they hope to connect onto the exchange, Lukasiewicz added, “Given the structure of our program, we’re not targeting a number of market makers, just a certain level of quality and size. This program is designed to attract institutionally capitalized market makers that can scale with our company in the future.”

In addition, in the company’s prepared statement about the equity model , Lukasiewicz stated “I’m excited to bring the next level of professional market makers into the Bitcoin space and provide additional value to those who are already active in it. By incentivizing active market-making, this program will convert into deeper liquidity and tighter spreads for all participants in the Bitcoin industry.”