The former bitcoin trading division at SecondMarket has relaunched as the Digital Currency Group’s (DCG) latest subsidiary, Genesis Trading.
Advertising itself as the first regulated broker-dealer in the US to specialize in bitcoin, Genesis is the latest development at Barry Silbert’s increasingly active organisation.
The trading firm offers institutional and private investors a way to buy and sell large blocks of digital currencies such as bitcoin, litecoin and ripple, a specialty its team honed sourcing bitcoins for SecondMarket‘s private investment vehicle, Bitcoin Investment Trust.
Genesis CEO Brendan O’Connor suggested that the launch represents more of a rebranding than a formal market debut, given Genesis Trading’s established history in the space.
He told CoinDesk:
“We have been trading since 2013. Within our space, the numbers that we have done make us the largest over-the-counter (OTC) market maker out there, so this is our opportunity to market ourselves to the world. Prior to this point, we haven’t really been able to do that.”
The 10-person team will continue to operate as the authorized participant for the Bitcoin Investment Trust, the sponsor that obtains the underlying assets needed for the fund.
O’Connor went on to express his belief that the firm is the first broker-dealer in the US regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) to actively trade bitcoin. Genesis Trading, he added, is already working with clients including hedge funds and alternative asset fund managers.
The news follows the 26th March debut of Grayscale Investments, which currently sponsors the Bitcoin Investment Trust as a subsidiary of DCG.
Silbert, SecondMarket’s long-time CEO, resigned from his position in July, announcing the bitcoin-focused initiative DCG in October.
Competitive pricing
Prospective customers of Genesis Trading will need to follow strict anti-money laundering (AML) and know-your-customer (KYC) regulations, O’Connor said. Despite this, he believes the firm’s buying process is competitive with major exchanges and brokerages.
“We have the ability to buy for our own book,” O’Connor said. “If people are interested in buying block size, we’re defining that as 25 BTC or more. People can contact us, we ask them to fill out a new applicant profile form and they will go through a vetting process.”
O’Connor aims to parlay his team’s market knowledge into relationships with clients he believes are too busy to use traditional exchanges, and thus, require a strong connection with their broker-dealer.
“Guys that are in those positions are typically very busy and relationships and trust really mean something to these people,” he continued.
Long-term bulls
O’Connor indicated that Genesis did not have a comment as to whether the launch would be in any way affected by the current price of bitcoin, which has traded below $250 for much of the week.
Its own strategy, he said, hasn’t changed in light of any recent fluctuations.
“We think the currency and technology is the most interesting thing in the payment space in the last 50 years, and our thesis has not changed,” O’Connor stated.
At the time of the interview, however, O’Connor kept his focus on the present, concluding:
“It’s a very proud moment for us. So we’re thrilled that Barry [Silbert] has given us the opportunity.”
Trading desk image via Shutterstock