Crypto exchange company, ErisX, has announced the launch of its spot market. The launch is part of the company’s bigger plan of integrating asset spot and exchange onto one platform.
The Chicago based company hinted earlier this month about the expected launch of its platform and on Tuesday, the company launched it to the public. A spot market is a type of market in which the trade of financial instruments or commodities is made immediately. It is different from future markets in which the trade usually happens after one or two days. ErisX is one of the latest entrants. Coinbase and Bitfinex are two of the biggest spot markets already operating in the United States.
It is reported that after the announcement the company enabled support for trading USD with major cryptocurrencies like bitcoin (BTC), Ethereum (ETC), Bitcoin Cash (BCH) and Litecoin (LTC). Matt Trudeau, Chief Strategy Officer at ErisX, explained in an interview that the current platform will include the exchange which would allow having both cryptos plus cash and said:
The spot market is the first component of our overall corporate strategy of what we’re looking to do in 2019.
The launch of spot market is just an initial step for the company, according to Trudeau. He says while it is a significant milestone, the company has many other projects in the pipeline. In the next step, the company is expected to launch its derivatives offering. However, to achieve that, the company needs to get approval from the Commodity Futures Trading Commission (CFTC) as soon as the company’s registered as a Derivates Clearing Organization (DCO) by the commission.
Though Trudeau did not give much insight to the progress of ErisX’s negotiations with CFTC, he assured that the company was in the process and would receive the clearance shortly. Trudeau also said that the company’s current team has experience handling CFTC and customers. He says that while the launch of the platform is “non-trivial work”, on boarding clients is the main work that the team is now ready for.
CEO of ErisX, Thomas Chippas, is wary of the crypto market. In his statement, he said that this is just initial work and the main work is still incomplete. He also said that the company was working with its partners and investors to create a platform with great functionality. He added:
“We look forward to a point where exchanges become so reliable and so performant that the market almost starts to take them for granted, that [they may already] do for other, more mature capital markets. In terms of fundamental infrastructure, we hope to make a competent [platform], that people confidently use our exchange and clearinghouse”.
Just last year, the company raised more than 27 million dollars in its series B investment from investors like Monex group, Fidelity and Bitmain. However, with the launch of the platform, the company also announced that its third round of series B funding has closed with another 20 million dollars. Matt Trudeau says:
There’s a process of building a new market, so the exchange technology needs to be deployed, the [clearinghouse] stack needs to be deployed and tested, there also needs to be new clients
US Spot Markets
Coinbase has officially attained Unicorn status as the company was valued at 1 billion dollars after raising 300 million dollars in an investment round in October 2018. The spot market was launched by the company in 2015 and since then the company has grown significantly. It is one of the most prominent and essential startups working in the crypto landscape. Bitfinex also enjoyed relative success after the launch of its spot market; however, the company lost more than 700 million dollars in 2017 due to hacks and funds mismanagement. The company was also accused of covering up the said losses by using funds from a sister company.