If 2017 was the honeymoon phase for bitcoin, with valuations soaring by triple-digit percentages, the first few months of 2018 have proven to be a more rigorous training ground for bitcoin, Ethereum and the myriad other cryptocurrencies on the market. Most have seen valuation drops of 50 percent or more in the first few months of the year.
Between the end of 2017 and April 2018, the spectrum of digital currencies have matured within the finance ecosystem. Those necessary steps toward wider adoption and literacy among other financial vehicles have come slowly. Brokerages like Fidelity as well as the SEC and other government agencies are still negotiating how to integrate something so novel into their existing frameworks.
Bitcoin, On Balance
Other brokers, platforms and online entities have picked up the slack in molding the present and future iterations of cryptocurrency trading. Greenwich Associates Vice President Richard Johnson, who specializes in market structure and technology, said there's reticence in big finance to back the asset as well as the innovations being pushed by technology firms toward that end.
"For most financial institutions, cryptocurrency adoption is not a big priority," Johnson said. "There is still a sense that the market is not mature enough for mainstream adoption, and all of the innovation is occurring in the crypto/fintech space. Regulatory uncertainty is also leading to a ‘wait and see’ approach."
Some wariness toward cryptocurrencies could be explained by the sometimes drastic reaction among coin markets to looming federal oversight into what is intended as a decentralized financial device. While that is slowly changing, the consequences of such direct control have yet to be fully reckoned by either crypto investors or government institutions.
When asked about how government oversight might affect digital currencies, Johnson remained sanguine.
"Regulation — in the short term, it is a headwind, as people are waiting for further clarity, but in the long term a sound regulatory framework will provide a tailwind to innovation and adoption," he said.
As the CEO and co-founder of the charting platform TradingView, Denis Globa is part of the push from fintech firms that are gradually shaping how traders are able to access cryptocurrencies.
"You can love or hate crypto, but one thing is undeniable — it’s massive," Globa said as he explained the introduction of crypto exchange Poloniex to TradingView. "Crypto trading volume is already sizable, but platforms that currently offer crypto trading are not as advanced as platforms for regular assets, or as numerous. So we figured we’d give it a shot."
Poloniex, which started in 2014 in the same time frame as the likes of CEX.io and BTCC, is one of a number of exchanges that have gained prominence in the crypto space by giving traders open access to bitcoin, Ethereum, Litecoin and other alt coin markets.
The adoption is "a first test to measure how much appetite there for crypto trading on TradingView," Globa said. "The main criteria in choosing Poloniex was simplicity and flexibility of integration."
Constantine Ivanov, TradingView's CTO and second co-founder, echoes Globa's sentiment. The move to include crypto in TradingView's platform was driven by was driven by demand from users who were seeking ways of better integrating crypto into their research and trading habits.
"Crypto markets are showing high volatility, which many people see as a chance to easily make some money," said Ivanov. "Trading (despite the name) has never been our primary focus — we always focused on analytical tools and the social aspect to make sure that more people think before they trade. But one way or another, trading is the ultimate goal."
The introduction of crypto trading to TradingView is intended to create ease of access and give traders a secure means of trading cryptocurrencies, Ivanov said — something that remains difficult to enact universally.
"We put a lot of attention on security, and that’s why all of our trading integrations work through a direct 'browser-to-broker' connection, without touching our servers," the CTO said.
"That’s why it’s so critical for the broker to have a modern WEB/REST API. This eliminates any additional security risks to the trader and to TradingView, and it’s the only type of integration that we undertake."
Despite the experimental nature of these first steps, TradingView's Globa said he's committed to the idea of cryptocurrencies exerting greater influence among financial markets and institutions — once they catch up, of course.
CTO Ivanov said TradingView would love to connect traditional large stockbrokers as well.
"But they are often technologically lacking or won’t give out their API. Maybe they’ll get their act together when they see that browser trading is getting larger and larger."
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