Welcome back to the Forefront Week in Review! On behalf of all of us at Forefront, here’s hoping your holiday season was restful and your 2019 is off to a promising start.
For better or for worse, New Year’s resolutions are one of January’s defining traditions. No matter how well things have been going, there’s always some area of our lives, personal or professional, that could use extra attention in the coming year. We don’t claim to know what change will make the biggest difference in your life… but if you’re looking for a resolution you can easily keep, why not vow to stay more on top of the biggest headlines in trading and market structure? In return, we’ll continue to make the Forefront Trading Digest the best it can be by curating the top stories of each day and listening to feedback from our loyal subscribers. We appreciate every single person who starts their day with us, and we’re excited to keep bringing you the news as we embark on this new year.
Looking at the headlines, the saga of Bakkt took another turn this week, as ICE’s much-anticipated cryptocurrency project announced a $182 million fundraise, with investors including M12 (Microsoft’s venture capital arm) and Galaxy Digital. The launch of the firm’s bitcoin futures product has faced numerous delays, but given this level of financial support, it certainly appears that the finished product will be worth the wait. Elsewhere, Rob Daly of Markets Media spoke with numerous executives from across the financial services industry to learn their predictions for the year ahead — and several Forefront clients were on the list, including TORA, Confluence, Luminex and OpenFin.
This week’s Week in Review features stories by Daly, Kate Clark of TechCrunch, Stephen Gandel of Bloomberg and Frank Chaparro of The Block, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.
What if George Bailey Owned a Broker-Dealer Instead?
Security Traders Association | Jim Toes
Once again, Christmas Eve at my house was spent watching It’s a Wonderful Life, with Jimmy Stewart playing George Bailey, a steadfast pillar in his hometown who also owns a building and loan company that bears his family name. In all the years of watching, Good Ol’ George always inspired thoughts associated with valuable life lessons like, how random acts of kindness have a rippling effect. This year was different. All I could think about was, “What if George Bailey had owned a broker-dealer instead of a community bank? Would our industry be in a better place than it is now?”Read More
Exchange, ATS and Clearing News
Top 9 Market Structure Trends for 2019
Greenwich Associates | Staff
The post-crisis era is over. Easy-money policies around the world are coming to an end, interest rates are rising, volatility is returning, and what felt like endless market upswings are no longer assured. And now that trading desks have senior vice presidents who were still in school when Lehman Brothers failed, the path forward is not about how it used to be, but how it should be now. With that in mind, and in no particular order, these are our Top 9 Market Structure Trends for 2019.Read More
Outlook 2019: Robert Dykes, TORA
Markets Media | Rob Daly
To remain competitive in 2019, traders will need to focus their attention on where they can add the most value. To do that, they will need automated trading solutions they can trust to achieve the best execution for the bulk of their orders. The AI-driven tools we offer at TORA to assist clients with pre-trade TCA and algo selection are being rapidly adopted and we anticipate the appetite for tools like these will increase in 2019.Read More
Buy Side News
Hedge fund managers set on starting their own firms in 2019 face the worst money-raising environment in years. Only one is slated to begin with more than $1 billion: San Francisco-based Woodline Partners, founded by former Citadel duo Michael Rockefeller and Karl Kroeker. The next-biggest are being built by veterans of well-known hedge funds that have either closed or are winding down, according to people familiar with the plans.Read More
NYSE Operator’s Crypto Project Bakkt Brings in $182M
TechCrunch | Kate Clark
ICE’s cryptocurrency project Bakkt celebrated New Year’s Eve with the announcement of a $182.5 million equity round from a slew of notable institutional investors. ICE established Bakkt to build a trading platform that enables consumers and institutions to buy, sell, store and spend digital assets. This is Bakkt’s first institutional funding round; it was not a token sale. Participating in the round are Horizons Ventures, Microsoft’s venture capital arm (M12), Pantera Capital, Naspers’ fintech arm (PayU), Protocol Ventures, Boston Consulting Group, CMT Digital, Eagle Seven, Galaxy Digital, Goldfinch Partners and more.Read More
Regulatory & Legal News
If the Stock Market Has a Problem, His Job Is to Fix It
Bloomberg News | Stephen Gandel
If there is a problem with the stock market, the person in charge of fixing it is a former political science graduate student who once led student efforts against nuclear waste and took a year off from college to travel the world with his guitar. Brett Redfearn, who graduated from Evergreen State College in 1987 and then earned a master’s degree in political science from the New School for Social Research, was named head the SEC’s division of markets and trading in October 2017. Since then, he has become, at least on Wall Street, one of the most divisive market regulators under President Donald Trump.Read More
Blockchain & Crypto News
Stablecoin Projects Are Paying Rebates to Traders, and It Caused a Big Headache for Paxos
The Block | Frank Chaparro
When crypto exchange Gemini launched its much lauded stablecoin in 2018, it hoped the market would view its dollar-aregged coin as a regulated and more trustworthy alternative to Tether. Still, things got off to a slow start, with GUSD lagging behind its competitors. Gemini dollar currently has $90.3M in circulation while Paxos has $132.2M and USDC has $287.2M. To spur adoption, Gemini offered their Gemini dollar to some over-the-counter trading desks at a 2% discount – meaning each $1 token could be bought for 98 cents. However, traders spotted an arbitrage opportunity in the deal where they could buy the discounted GUSD and then exchange it for PAX, Paxos’ stable coin, at the full dollar price – pocketing the 2% difference.Read More
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.