LMAX Digital, which today celebrates its second anniversary and reveals that $85 billion worth of cryptocurrencies has traded over the platform since launch, plans to expand through data and products in a bid to “move crypto currencies into the mainstream”.
According to LMAX Group CEO, David Mercer, the group will be investing in its market data distribution capabilities to enhance the quality of market information available to investors and to provide a credible overview of the digital currency market. “In line with this goal, in the near future we are seeking to add our trade and market data to more of the world’s leading market reference indices,” he says.
Additionally, Mercer says the group is looking to expand its product portfolio “to continue to meet the needs of our clients as we continue our growth trajectory in line with the growth and maturity of the asset class”.
“Over the past two years, we have expanded our client base to include the largest global proprietary trading firms and some of the world’s largest retail brokers, and more recently have started welcoming regional banks to our platform,” Mercer says.
Mercer says that in Q1 2020, LMAX Digital saw an increase of 41% in quarterly trading volumes, reaching $20 billion, on the back of organic growth and broader market volatility. “During the periods of recent volatility, we have continued to offer consistent, deep liquidity and robust execution to our clients,” he says.
“We have been impressed by the resilience of cryptocurrencies, particularly Bitcoin, and note that they have been relatively stable compared to other asset classes which have enjoyed central bank intervention and still shown extreme levels of instability,” he continues. “We see this as an encouraging sign that investors are starting to place more value in digital currencies and have continued to trade through spikes in volatility. All of which bodes well for the gradual maturing of the asset class.”
Jenna Wright, managing director of LMAX Digital, adds: “Sophisticated algorithmic traders have been particularly interested in trading digital currencies and have generated profits through both market making and quantitative alpha strategies.”
“The value of our integrated business model, being part of the LMAX Group, has proven to be a strong differentiator for LMAX Digital,” she continues. “Being able to offer FX instruments alongside cryptocurrencies enables institutional clients to hedge their FX exposure cost effectively and efficiently in an industry where banking is difficult.”
“I am certain that LMAX Digital will play a large part in the evolution of this industry and will drive further acceptance of cryptocurrencies as an established asset class by institutional traders. This will oblige large global banks to offer institutional investors traditional banking services and credit, which will in turn add increased liquidity to the market and move crypto currencies into the mainstream,” Mercer adds.
Over the past 12 months, LMAX Digital says $75 billion traded over the platform, representing 20 million trades completed, with $250 million in average daily volumes as of May 2020.