Revising Chris Concannon’s aspect of Crypto

Chris Concannon, Senior Partner at Virtu Financial, speaks at the Reuters Exchanges and Trading Summit in New York March 29, 2010. REUTERS/Natalie Behring

The interview of the chief operating of Chicago Board Options Exchange and trading expert Chris Concannon in Quartz was doubtlessly interesting and worth talking. Concannon is convinced that Cryptocurrencies are here to stay, but its success is still unknown. Nevertheless, people have learned to trade in much different kind of assets, from onions, as he characteristically says, to gold and futures.

Having delved into the structure of Crypto, he stated that this new currency has more similarities to the traditional ones than differences. The technical difficulties of the creation of such a coin are those that form their value. A process is similar to that of the ordinary coins valuation regarding their mechanical or physical properties. The difference is one and unique. The mining of Crypto is electronic. However, this feature makes them valuable and promising.

Having being asked about the caution of big investors or market makers regarding this new investment opportunity, he is quite mindful. He recognized the “intuition” of some sophisticated proprietary firms investing in this type of currencies. Characteristically, he points out that the current bids in their trading platform are encouraging from those kind of companies and individual looking for new deals.

On the other hand, he wandered about the regulatory framework of various institutional investment banks, which excludes Cryptocurrency trading in contrast to traditional derivatives like regulated futures. In those cases, the demand for investment options covered by hedge funds or other similar products.

According to Concannon, the “dark side” of Crypto is their intangible trait. People cannot save the Crypto into their pockets, and mining is hard to explain the task. Trading in Crypto is yet in our lives but the success of it (adoption from institutional investors) is still unknown, and the form of it will probably change under forthcoming regulations. Speaking about the technical staff, Chris Concannon tries to explain the need for cooperation between AAA credit clearinghouses and investors to increase trading exposure.

The market of Crypto is still “small” for institutional investors. This is a fact. The ceiling could be raised by the use of derivatives like hedge funds. However, in real time conditions, this could be excessively hard – a challenge – according to Concannon. To get such exposure, traders should “play” in multiple crossing markets. Nevertheless, this means multiple custodians and custody is “harsh” when you are an active trader, Chris said.

The next question was about ICO-s and the SEC issued guidance. Concannon admitted that there were some complaints about them and the SEC’s movement was preventive in any case. He countersigned this movement and suggested a regulatory framework for the flexible structure of ICO’s, which could lead to serving the needs of small companies.

Finally, Concannon seemed to be discouraged regarding the future capabilities of ICO architecture, due to mainly the regulatory restrictions of investing process and the broad number of investors needed during the Initial Public Offerings. Revising Chris thoughts and beliefs, we can expect high potentials in the world of Crypto, but the regulation will play a major role in their success.

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