Disruptive Technology

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Bitcon LogoThe more research that I dig up for an upcoming feature on institutional investors and bitcoins, the more I believe that it will be a few more years before asset managers are able to profit from digital-currency investments.

This has nothing to do with the maturity of the bitcoin infrastructure, which is fine and only needs more users to exploit the network effect.

It is that Satoshi Nakamoto was thinking about the individual, and not of banks or institutional investors, when he proposed the digital currency.

If he had, he would not have designed an anonymous currency that traded over-the-counter (OTC) in a peer-to-peer fashion. Read the rest of this entry »

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Headshot or Wall Street Bitcoin Alliance's Ron Quaranta

Ron Quaranta,
Wall Street Bitcoin Alliance

Kicking of the second season of The Daly Post Podcast, I sit down with Wall Street Bitcoin Alliance executive director Ron Quaranta and discuss what institutional investors, broker-dealers, exchanges and vendors need to do to take part in the ever-growing Bitcoin market.

Although these cryptocurrencies have strong libertarian, over-the-counter, and retail roots, Quaranta sees the markets maturing quickly and growing dramatically enough in the next few years to support institutional-sized investments.

However, there is much to do in terms of developing the proper trading infrastructure and market regulations as well as hashing out the necessary tax and accounting rules for the new asset class, he adds

Check out the entire conversation here or on iTunes.

 

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This may be a poorly timed post since the Tabb Forum’s annual fixed-income conference is tomorrow, I’m pretty bearish on meaningful changes in corporate-bond market these days.

There’s been a lot of activity in the electronic-trading space for fixed income over the past year as agency brokerage ITG and Tradeweb launch their respective trading platforms for corporate bonds to compete against MarketAxess’s all-to-all trading model.

Even this week, we saw Lime Brokerage co-founder and former-CEO Alistair Brown announce the February launch of the first phase of OpenBondX, a new electronic fixed-income trading venue.

All of this activity and innovation is reminiscent of all the ECNs that sprung up after the US Securities and Exchange Commission (SEC) changed the order-handling rules in the 1990s and swap-execution -facility(SEF) explosion when the SEC and US Commodity Future Trading Commission (CFTC) began writing the new rules for over-the-counter (OTC) swaps trading mandated by Dodd-Frank.

BlackRock only added gasoline to this fire when it published its white paper calling for a reform of the corporate-bond market’s market structure in September 2014 asking for new and innovative trading models for the market.

However, maybe the buy side should start looking for change internally and not externally.

 

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Today kicks off the 21st annual International Conference on Case-based Reasoning in Saratoga Springs, NY.

The four-day event brings CBR veterans and novices together to discuss research on and applications for the problem solving methodology.

Never heard of it? Neither had I, until I spoke with representatives from Verdande Financial Services, one of the conference’s sponsors.

In its most basic form, as explained to this 18th century history major, the CBR methodology uses past experiences to identify occurring trends, which may lead to a familiar event. (You can find far more academic explanations and reading here and here.)

Organizations can employ CBR to identify potential problems and arrest them before they cause a major headache.

For example, Verdande Technology, Verdande’s parent company, first deployed its CBR-based Edge platform in the energy industry, where it identified potential problems for off-shore drilling rigs. By comparing current performance data with historical performance data, oil companies could address issues before they needed to replace a drill bit or sink a new drilling shaft. Each process could cost a company millions of dollars.

 

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In a time of layoffs, belt tightening and the chanting of “do more with less” ringing through departments, there is nothing better than watching startups pitch for capital. They are dye-in-the-wool optimists who think they have the better mouse trap. That’s why I’m happy that I managed to attend the last 2013 regional startup challenge sponsored by Innotribe, SWIFT’s innovation initiative last Thursday.

This was the third and final regional challenges hosted by Innotribe this year. It held one in Singapore in April and another in London in May. In each competition, the audience, which is composed of venture capitalists and angel investors, select three startups and two innovative companies to send to Sibos, where they will compete for a $50,000 grand prize.

Second- and subsequent place winners can expect a warm handshake, according to Innotribe’s Nektarios Liolios, who emceed the New York event with colleague Matteo Rizzi.

With heightened airport security, I guess a set of steak knives really was out of the question.

To be honest, the face time that participants had with venture capital firms attending and judging at these events is more valuable than the actual cash prize.

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