Bitcoin’s sustained bull market is proving to be further evidence that it is the ultimate uncorrelated asset.
Unaffected by normal economic factors such as inflation, interest rates, GDP growth etc.,- it offers an unaligned alternative to investors that does not exist elsewhere in the investment universe.
Indeed, evidence is growing that institutional investors are beginning to add their weight to the retail flow that currently dominates alternative asset trading and driving up prices.
Today, the trading volume at over $150 billion per day (according to CoinMarketCap when the article was published) and as institutions increase their involvement in the market, they are looking for secure, compliant and regulated platforms so that they can trade with confidence.
At AAX, we are at an advanced stage to provide that platform, using best-practise security and connectivity that the traditional markets offer, combined with deep liquid markets and a wide choice of investable digital assets.
Bridging tried and tested practices with the future
The first step is to provide a trusted trading environment that institutions are familiar with. AAX will provide institutional-grade trading technology and market infrastructure.
Key to this is the fact that AAX is powered by the same technology used by the London Stock Exchange. In what is the first collaboration of its kind, AAX will bring the ability to trade digital markets to the same institutions that use the London Stock Exchange.. By doing so, traders will know that they remain plugged into institutional-grade trading technology and regulated market infrastructure.
Low-latency connectivity for institutional traders
AAX is also built to be a platform that can deal with the most demanding automated trading strategies to cater for the needs of institutional investors.
When it comes to choosing an exchange, institutional investors often use connectivity and latency as a parameter. AAX will be offering tools which are essential to institutional market participants including FIX API connectivity access, a consolidated ticker, and access to regulatory reporting tools. AAX will provide MITCH protocol developed by LSEG, enabling clients to receive real-time data at the lowest possible latencies. With additional co-location, AAX is also offering ultra-fast transfer of data, allowing for faster execution speeds and more efficient trading, especially for institutions looking to target sub-millisecond tick-to-trade latency.
Institutional standard security
To meet institutional standards for market integrity and asset security, digital asset deposits on AAX are to be maintained offline in vaults located in multiple countries around the world. Thanks to this feature, AAX is capable of backing any client liabilities.
We have also appointed Kroll, the leading global provider of risk solutions, as our security advisor. Kroll shares our security-first mindset and brings extensive experience offering cyber security solutions to financial institutions, software and internet, law firms and government agencies from around the globe.
Fighting against market manipulation
AAX offers bank like KYC procedures and implements robust surveillance practices similar to those found in traditional trading venues, to identify and stop suspicious trading patterns.
Using LSEG Technology, our market surveillance team will constantly watch for any evidence of market manipulation, price rigging or other practices aimed at distorting prices to maintain a fair trading environment for all.
Develop the perfect portfolio
AAX will also offer Over-the counter (OTC), spot trading, and futures trading to users. Such a diverse product offering gives institutional investors the flexibility to create the perfect portfolio for their clients.
Managing risk is one of the biggest concerns of institutional investors. The digital asset futures contracts of AAX provides an effective way to hedge against price fluctuations, and brings institutional investors into familiar territory where futures contracts in equities, FX, bonds and commodities, are popular tools for investors to hedge risk.
The end result
By providing institutional investors with the tools they need to trade digital assets in a trusted trading environment is likely to bring more confidence to the market, increased institutional investment and added liquidity.
To find out more about AAX or to pre-register please visit www.aax.com.