Digital asset financial services provider, BitGo, is today launching institutional trading services through its new entity BitGo Prime, claiming a first in offering lending, trading and custody in the digital assets space. Nick Carmi, who joined BitGo last year as head of financial services, has been appointed CEO of the new entity in addition to his existing role.
In March, BitGo launched an institutional digital asset lending service with a goal to build a business similar to those in the traditional financial markets.
With today’s launch, the ability to trade anonymously from secure, insured cold storage is being offered exclusively to BitGo Prime clients, whose assets are held with qualified custodian BitGo Trust. BitGo Prime’s trading services will provide investors with increased liquidity, fast execution and fair aggregate pricing, the group says in a statement.
Through BitGo Prime, institutional investors will be able to trade directly from their custodial wallets. Initially, the trading services will be offered to investors with fully funded accounts; however, lines of credit will be offered at a later date.
While the concept of lending is more akin to credit provision in FX world, Carmi notes that lines of credit don’t exist as such in crypto yet. “People rely on borrowing and lending in crypto,” explains Carmi. “Right now, our clients trade with BitGo Prime on a fully funded basis. The next evolution of this is going to be how we enable our clients to trade from their wallets on a line of credit, similar to the FX market. FXPB is a concept that doesn’t yet exist in crypto world. We’re hopeful that, as our lending business matures, and our trading business matures, we’ll be in a position to replicate some of that model.”
The launch follows a private beta during which BitGo Prime worked with leading institutions in the space to hone and refine its trading and lending offering. According to Carmi, the launch includes several well-known names amongst the institutional nonbank and crypto exchange set.
“BitGo Prime has relationships with a handful of market makers and counterparties that provide liquidity to us. We aggregate the pricing that we get from these counterparties into a best bid/best offer, and then expose that to our clients. So our clients get the security of trading as well as the anonymity,” explains Carmi. “The clients – some of which are big foundations and family offices – like the idea that they can trade anonymously from the security of their wallet, and without slippage.”
BitGo Prime is starting with the most active coins – bitcoin and ether – but Carmi says additional coins will be added based on client demand. BitGo currently covers 250 coins and Carmi says additional coins can quickly be made available. BitGo Prime clients trade from seamless, fast, secure, insured cold storage and operate within a riskless principal model.
The BitGo Prime team includes Andres Cifuentes, who joined BitGo late last year. He moves over to the Prime team as director of liquidity services.
“For the past two years, we have experienced exceptional growth and global expansion of new products and services,” says Mike Belshe, CEO of BitGo Inc and BitGo Holdings. “Launching BitGo Prime with its best in class trading and lending services is a critical milestone in the company’s journey as a prime broker and the leader in digital asset financial services. Nick and his talented team did an extraordinary job helping us to build a better financial model for our institutional clients.”
“Our challenge was to build an innovative, sustainable trading and lending business that bridges the complex world of technology with the demands of the traditional financial markets,” adds Carmi. “BitGo Prime delivers a new level of control over cryptocurrency trading by aggregating liquidity from multiple counterparties, optimising order flow and executions directly from the investors’ custodial wallets.”
Prior to joining BitGo, Carmi was at Tower Research Capital, where he was global head of the FICC business, responsible for oversight of operational risk, prime brokers’ leverage and counterparty trading limits, developing access to new products including NDFs, currency options and cryptocurrencies.
Prior to joining Tower in 2015, Carmi was a director in listed and OTC clearing sales at Deutsche Bank, where he helped start fixed income prime brokerage for treasury and repo services and assisted the equity derivative franchise in building out its OCC clearing service. He joined Deutsche Bank from SpreadZero, a dark pool business for fixed income securities, where he was CEO. Earlier in his career he worked at Barclays, Lehman Brothers, UBS and Credit Suisse in a variety of prime brokerage-related roles.
In 2018, BitGo became the first regulated trust company and qualified custodian purpose-built for digital assets.