London start-up to launch new market for Bitcoin
Monday 21 April 2014
A start-up is launching a new market for Bitcoin aimed at institutional investors, amid growing interest in the digital currency from hedge funds and investment banks.
London-based Coinfloor is setting up an over-the-counter market for Bitcoin. Mark Lamb, Coinfloor’s chief executive, said: “We’re seeing a lot of demand… Most of the Bitcoin liquidity is happening off books – it’s a similar problem to the equities market, where you see a lot of these orders happening on dark pools.”
The company, which launched last year, is partnering with a Financial Conduct Authority-regulated trading firm to help financial institutions meet bulk orders for the digital currency. The silent partner will act as a “market maker” – buying and holding Bitcoin to ensure investors can get the currency when they need it.
Tom Robinson, director of the UK Digital Currency Association, said: “We are seeing growing interest from institutions, especially hedge funds. We’ve had interest from some investment banks in Europe as well.”
Some institutions in the US have already made bets on Bitcoin: the Wall Street hedge fund Fortress Investment earlier this year revealed that it had bought $20m (£12m) of the virtual money and has reportedly invested $10m in the London-based Bitcoin exchange Bitstamp.
Mr Robinson’s Bitcoin storage business Elliptic also handles the crypto-currency for US-based Falcon Global Capital, the world’s first Bitcoin investment fund, which launched earlier this year.
Coinfloor, Bitstamp and Elliptic are part of a wave of UK start-ups aiming to turn London into the centre of the emerging Bitcoin industry, spurred by the collapse of MtGox earlier this year.
The Tokyo-based MtGox, once one of the biggest Bitcoin exchanges in the world, froze withdrawals for weeks before filing for bankruptcy, amid accusations of theft from the service and financial mismanagement.
Mr Lamb said: “The bankruptcy of MtGox was an event that is often seen by the public and investors as a pretty negative event for Bitcoin; but for most entrepreneurs, we’re seeing it as an incredible opportunity in the space.”
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 3 Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
- 4 The most powerful passports in the world
- 5 Chinese student carries disabled friend to school every day for three years
Nepal earthquake: How you can help victims of the Kathmandu disaster
Nepal earthquake in pictures: Photos show devastation caused by 7.8 magnitude earthquake
Royal baby: Live updates as superbug closes ward at St Mary's Hospital in London where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: The photo of a tree that proves the Tories have an image problem
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...