Bitcoin futures are one month old which means the first maturities are happening and while I can't think anyone would look at the futures for a ‘buy and hold’ strategy, the first month has been a somewhat sobering experience for many. There has, inevitably, been a lot of chatter about how volumes aren’t what they expected, although I can’t decipher whether this is genuine disappointment or just the crypto-bashers doing their thing, but either way, the modern day Green Shield Stamps haven't followed the script.
As more non-bank liquidity providers become active in the FX space, firms need to find ways to differentiate themselves to their counterparties, says Giovanni Pillitteri, portfolio manager at HC Technologies.
“I do think that there will be certain consolidation in some counterparties,” he said in response to a question about increased competition amongst liquidity providers. “If your edge is only based on speed, that’s going to be commoditised, so you need to have the full spectrum of solutions and offer that full spectrum of solutions to counterparties to be able to compete in this environment.”
Pillitteri also emphasised the importance of having a broader, cross-asset approach to trading in order to be a successful FX liquidity provider.