Five of the biggest electronic traders in the world are already trading bitcoin. Jump Trading LLC, Tower Research Capital LLC and Hudson River Trading are in the market, according to people familiar with the matter, along with Susquehanna International Group LLP. DRW Holdings LLC has been trading digital currencies since 2014, giving it a head start on competitors.
High-speed firms have remade virtually every other electronic market, turning transactions over to algorithms and measuring market moves in milliseconds. But low volatility and trading volumes have eroded profits, pushing them to look for new opportunities. , which has huge price swings, rose to a new high above $8,000 on Monday. And with CME Group Inc. (NASDAQ:) and Cboe Global Markets Inc. poised to offer bitcoin futures contracts, it will get easier for pros to place bets, either on gains or losses.
“What’s surprising me is how polarizing bitcoin is,” said Bobby Cho, head of over-the-counter trading at Cumberland, a division of DRW. “Everyone has a viewpoint on bitcoin, whereas with other asset classes you either care or you don’t care.”
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Cumberland mainly trades bitcoin and ethereum, but also transacts in zcash, bitcoin cash, ethereum classic and monero. Cumberland specializes in over-the-counter trading, helping institutions and individuals buy or sell large amounts of cryptocurrencies with a minimum trade size of $100,000. It also does algorithmic and electronic trading on digital-currency exchanges.
The crypto arm of Chicago-based DRW is extending its reach. Cumberland has counterparties in more than 35 different countries. It opened a desk in Singapore this week, adding to its locations in Chicago and London. Cumberland has about 15 employees in total, with more hiring on the way. Cho declined to comment on the division’s financials…