Atlas ATS has moved boldly since its creation in April 2013 to bring the gospel of Bitcoin to the buyside, by creating an exchange platform where institutional players can trade digital currencies among themselves in a sort of bitcoin dark pool.
The firm has also established exchanges in Canada, Europe and soon Africa for bitcoin trading, and this week will begin offering a white label trading platform that will allow firms to offer their customers an exchange platform to trade and store bitcoins. The new offering will give firms and their customers the ability to trade bitcoins by matching orders, route market data from other Bitcoin exchanges, and store the digital currency.
The evolving regulatory standards for Bitcoins are uncertain, and might stay that way.
Were leading the charge on this from a technology point of view, said Shawn Sloves, co-founder and CEO of Atlas ATS. Sloves, who previously developed trading products and networks at Mantara, Inc. and SunGard, is also co-founder and CEO of Fundamental Interactions, Inc., a tech company that develops virtual trading platforms and related appliances.
Sloves said he knew if Wall Street, merchants, the big banks, and most importantly, buyside traders were ever going take digital currencies seriously as an asset class, they needed a platform that made sense to them. Wall Street and buyside traders hate web-based trading systems, and we knew we had to create something like they were used to working with or Wall Street would not use it, he explained. Sloves added that the firm used Fundamental Interactions virtual trading platform-one that Wall Street traders were already familiar with-and adapted it to trade in bitcoin and other digital currencies. The infrastructure has to look like what they are used to, he told Traders.
Earlier this year, Atlas ATS partnered with Perseus Telecom, a provider of high-speed telecommunications lines for securities exchanges and trading firms, to build out its U.S.-based digital-currency exchanges. (Currently, the three largest bitcoin exchanges are located in Estonia, Bulgaria and China.)
Sloves said currently Atlas ATS trades about 60,000 bitcoins a month, less than 1 percent of total global trading volume; however, he expects the exchange to reach 5 percent of total trading volume by the end of the year. The Atlas ATS also is the only exchange to offer options on trading bitcoin.
While trading digital currencies has flown below the radar at many large asset management firms, that is changing as Bitcoin becomes more accepted by merchants and the buying public, Sloves said. He estimates there are more than 50 asset management firms with up to $100 million in newly created dedicated funds to investing in digital currency-with more firms expressing their interest to Atlas ATS with every passing week.
To help move Bitcoin into the mainstream, Altas ATS also partnered with a self-regulatory organization, the National Stock Exchange (NSX), to give its bitcoin exchange something the digital currency industry is sorely lacking-the appearance of regulatory oversight. However, the NSX was shuttered by parent company CBOE Holdings, Inc. in May, leaving those plans in limbo for now.
Still, Sloves is undaunted. Bitcoin is doing more volume in cash transfers than Western Union, and its coming up on PayPal, said Sloves, adding that means more merchants and participants needing to manage their exposure through trading. They need this platform to support the ecosystem-within the next two years, we want to build this infrastructure around the world.
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