Digital asset services firm Bequant launched a prime brokerage service for institutional clients to have easier access to liquidity, custody, lending and other products, the company announced Thursday.
With several services and pools of liquidity under one roof, Bequant is able to help institutional clients trade and expand their portfolios while keeping transaction costs low. Additional services include collateral management tools, smart order routing, leveraged trade execution and over-the-counter (OTC) block trading.
“We are tailored to a lot of quant [hedge funds] and our clients typically look at trading through automated strategies, arbitrage, you name it,” Bequant CEO George Zarya said. “What they require is … one account to access liquidity pools, manage collateral and gain access to lending.”
In traditional finance, prime brokerage refers to a bundle of specialized services offered by investment banks and securities dealers to their hedge fund clients. There are few prime brokers in the crypto space, but Bequant’s largest competitor is Tagomi, a New York-based prime broker that became the 22nd member of Facebook’s Libra Association earlier this year.
Crypto exchanges such as Gibraltar-based Huobi offer their own brokerage services as an additional service for institutional investors, but it’s still rare to find companies that offer a full range of prime brokerage tools.
Bequant provides access to spot trading at exchanges and over-the-counter (OTC) desks. The London-based firm plans to offer access to derivative liquidity pools in the future, Zarya said.
Bequant is connected to 18 different sources of liquidity including seven crypto exchanges, and plans to have 30 by the end of 2020, he added. (The process of onboarding a new liquidity provider – exchanging APIs and sharing commission schedules – takes around two to six months.)
“It’s important to know that centralized servicing is really important for the institutional players,” said Alex Mascioli, head of institutional services at Bequant. “We’re becoming a one-stop shop for these places to consolidate a fragmented market right now.”