New York based Bitcoin exchange Coinsetter has today announced it will begin offering margin trading and post-trade settlement to select business customers. Post-trade settlement allows customers to place trades on Coinsetter’s order book before making a deposit. This structure allows customers to trade without holding large balances on an exchange, limiting their exposure to third-party risks. In addition, the new program allows market makers to short bitcoin on Coinsetter’s exchange.
The company made its institutional aspirations clear in August last year, when it became the first Bitcoin exchange to provide FIX API access.
In detailing the ethos behind building on the exchange’s institutional remit, Coinsetter CEO Jaron Lukasiewicz today explained to LeapRate that “Coinsetter is expanding its institutional feature set today with margin trading and post-trade settlement for select business customers.”
“Post-trade settlement allows customers to place trades on Coinsetter’s order book before making a deposit. This structure allows customers to trade without holding large balances on an exchange, limiting their exposure to third-party risks. In addition, the new program allows market makers to short bitcoin on Coinsetter” concluded Mr. Lukasiewicz.
Traders utilizing Coinsetter’s FIX API are able to place and manage orders, as well as receive status notifications on these orders in milliseconds. The API also offers real-time, incremental market data updates (tick data) for Coinsetter’s full order book, an important tracking feature that is not available on any other bitcoin exchange. Subscribers receive notifications on every change in Coinsetter’s order book for thousands of price levels in real-time.
In the aftermath of security breaches that weaken the infrastructure of the bitcoin market, New York City-based Coinsetter is introducing a new way to mitigate risks for well-capitalized businesses – a group that represents the majority of capital holdings on Bitcoin exchanges. After depositing collateral in the form of bitcoin, Coinsetter will allow select businesses to buy and sell bitcoin on margin, settling balances after trades are executed. This model is aligned with the settlement method of exchanges in other markets on Wall Street.
Mr. Lukasiewicz made a further corporate statement regarding the exchange’s addition of post-trade settlement: “We have been testing a post-trade settlement offering with select business customers since December, and its value is apparent. Coinsetter’s business customers, many of whom represent important institutions in the bitcoin space, can now access liquidity without having to worry about bitcoins being hacked or USD holdings becoming tied up. The program also helps growing companies reduce their working capital burdens.”
In addition to post-trade settlement for businesses, Coinsetter’s designated market makers will now be able to take short positions on bitcoin. These additions expand upon an already robust feature lineup for professionals, including FIX 4.4 API connectivity, low latency and attractive pricing. Designated market makers may also be eligible to participate in Coinsetter’s Market Maker Equity Incentive Program, through which Coinsetter has opened 10% of its equity.
“The experienced team at Coinsetter is committed to providing clients with the most advanced bitcoin exchange in the world. The features announced today raise the bar even further.” Lukasiewicz added. “Our top priority remains security, and all users benefit from Coinsetter’s Securicoin technology. Bitcoins held in the Securicoin system are contained in highly protected offline wallets that never directly touch the internet. Furthermore, a human is always involved to verify the validity of each withdrawal.”