HFT Bitcoin Trading

Note from the CEO:  Oh Good! Now that the world is learning to say “BITCOIN” and actually kind of knows what it is, here come the high frequency folks to ‘muck it up’. Maybe the most active exchange should be on a remote Pacific island. Let’s see them put their computers there for an edge. Oh wait, maybe that IS a good idea.

With Bitcoin’s credibility and acceptance growing everyday it is actually not unexpected that high-speed traders would flock to the digital currency’s markets. With highly fragmented markets (multiple platforms), a 24/7 trading window and mostly novice traders/investors the HFT guys will do well. But their very interest in Bitcoin is a stamp of approval and will certainly make the market(s) more efficient, thus ever expanding the number of “players” and liquidity. It’s all a growth process.

“Zhou Shuoji is not a bitcoin believer. He says the cryptocurrency will never replace its traditional forebears, and he calls most of its proponents fanatics.

But for Zhou, a 35-year-old high-speed trader in Beijing, bitcoin is also too good to resist. His computers trade it 24 hours a day, seven days a week. Using lightning quick orders, they profit from tiny price discrepancies on the myriad venues where it changes hands.

“It’s the golden age to be in the bitcoin market, because it’s imperfect,” said Zhou, a former IBM technology consultant whose firm, Fintech Blockchain Group, runs a bitcoin hedge fund and venture capital fund.

Forget libertarians, speculative individual investors and Chinese savers trying to spirit money overseas. The reality is that professionals armed with cutting-edge technology now drive as much as 80 percent of bitcoin trading, mimicking strategies honed by some of the biggest players on Wall Street. To them, bitcoin is just the latest asset class ripe for conquering with machines.”

Read Full Story at Bloomberg