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The Origin of the Crypto Species

Traders Magazine Online News, June 5, 2018

John D'Antona Jr.

Do you crypto?

It seems everyone knows a little something about crypto these days. The crypto universe – from tokens to trading to capital formation – has exploded in a way that can best be described being similar to the Big Bang. In the course of just a year, this once under-the-radar market has gone from the virtual shadows to the mainstream – from Wall Street to Main Street. Once only known to a handful of Millennial entrepreneurs and traders, all things crypto now dominate the public discourse.

Crypto has gone viral. But despite all the crypto-mania and hoopla, many lingering questions surround the mysterious market. Is crypto an asset class? Who is responsible for regulating it? Will it replace the equity markets as a means of capital raising? And of course, just who is buying and/or selling it?

Let’s take a deeper look.

Perhaps the answer to some of these questions begins with Michael Chin, Co-Head of Trading at Thomson Reuters, who told Traders Magazine that he considers cryptocurrency as an asset class – much the same as equities, futures, options, derivatives, fixed income and foreign exchange.

Michael Chin

“While there is much debate about whether crypto is considered an asset class given its sheer volatility, liquidity challenges and unregulated nature, we believe it is an emerging new asset class that is getting the serious attention of institutional investors who are looking at it as a diversifier for their investment portfolios,” Chin said. “Crypto as an asset class is in the eye of the beholder and whatever your view is, we see our role as providing greater transparency through information and connectivity.”

Step Right Up, Don’t Be Shy

So, who is actually buying and selling crypto?

Chin said that when he speaks to his clients, interest lies more with retail investors than institutional investors. He shared with Traders Magazine the results of a recent crypto survey sent to the clients - asking them about their views on crypto. In the survey, 70% of respondents said they were not thinking about trading cryptocurrencies at this time. When the firm asked what Thomson Reuters can provide to assist in their trading needs, nearly 85% of respondents who said they were thinking of trading cryptocurrencies said that both data and news were the most important. 

“At this point, it seems the buy side is taking more of a wait-and-see approach,” he said. “You're finding that it's the smaller hedge funds, the ones that are taking more of a speculative view, that are involved.”

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