In an announcement, the New York-based Bitcoin exchange Coinsetter says that it is introducing margin trading and post trade settlement—a new means to mitigate risks for select business customers. The ambitious project was in the pipeline for long; however, as the company sees huge potential in the digital currency, decided to release it now.
Talking to media professionals a source from the Bitcoin exchange said that it aimed Wall Street will allow well-capitalized businesses, which represent a lion’s share of capital holdings on Bitcoin exchanges, to buy and sell Bitcoin on margin after they deposit collateral in the form of the cryptocurrency.
According to Coinsetter, the decision to allow margin trading and post-trade settlement in Bitcoin will enable them to settle balances after trades are executed. Nonetheless, as this according to them is a structure aligned with the settlement method of exchanges in other markets on Wall Street, there won’t be any need to change anything.
Additionally, as post-trade settlement from Coinsetter enables customers to place trades on its order book before making a deposit, allowing them to trade without holding large balances on an exchange, there won’t provide any exposure to third-party risks. Thus, this is going to not just reduce the practical difficulties but limit the risks to great extent.
Will Help Growing Companies Reduce Working Capital Burdens Says Company CEO
Jaron Lukasiewicz, CEO of Coinsetter says that with the announcement his organization which has been testing a post-trade settlement offering with select business customers since December has fulfilled its desire. He admitted that this is going to be a major success for his company and its value is apparent as well.
Nonetheless, Jaron Lukasiewicz also said that his company’s business customers, many of whom represent important institutions in the Bitcoin space, can now access liquidity without having to worry about Bitcoin being hacked or USD holdings becoming tied up. He added that the program also helps growing companies reduce their working capital burdens.
Thus, not just post-trade settlement for well-capitalized businesses, Coinsetter’s designated market makers will also be able to short Bitcoin on the exchange. Additionally, these new features are additions to an already robust feature lineup targeting professional traders, which include low latency, attractive pricing, and FIX 4.4 API connectivity.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org