How Apifiny’s Trading Network Will Make Crypto Markets “More Efficient and Healthy”
Apple Inc. (NASDAQ:AAPL) stocks trade at the same price regardless of the platform used to gain exposure to a market.
The same cannot be said for cryptocurrencies. Their rise has coincided with the development of hundreds of new exchanges. Liquidity can be fragmented, which has created inefficiencies.
By eliminating inefficiencies, participants can earn a premium for their cash inflow. It’s hard to do if you don’t have the right infrastructure to transact quickly.
Apifiny Group Inc.which is expected to go public through a merger with SPAC Shelter I Inc (NASDAQ:ASPA), a special purpose acquisition company, offers a solution that solves the above.
Benzinga chatted with Haohan Xuthe founder and CEO of Apifiny to learn more.
The context: Prior to founding Apifiny, Haohan was at Columbia University studying engineering. During his studies, he had been active in the cryptocurrency markets, buying and selling between exchanges in an effort to extract premiums to spot.
“I realized that the price was so different between Coinbase Global Inc (NASDAQ:COIN) and Binance, at any time, that you could actually arbitrate,” he said. “Having to open more than 30 accounts on different exchanges, [though] … is an obstacle for institutions.
During this venture, he realized that funds built around similar strategies have a huge challenge. Mainly, crypto markets are incredibly fragmented and it can be difficult to adapt strategies if there are too many moving components like trading on different exchanges.
“I realized that I had to build this tool for myself,” Haohan told Benzinga.
“I quickly hired a few engineers when I realized it was much more complicated and needed people who had worked at Intercontinental exchange (NYSE: ICE) owned by NYSE and Nasdaq Inc. (NASDAQ:NDAQ). »
After developing a proof of concept, Haohan knew it was something others would want to access and so he founded Apifiny.
The value: Unlike some of its competitors, Haohan claims that Apifiny offers more transparency.
“We have a more hands-on approach as we partner and connect with different exchanges across the landscape,” he said during a discussion about building tech alongside the CTO. Jeremy Xue.
“We directly reflect order books without mark-ups or changes. We provide access to all these exchanges by opening a single account. We translate all exchange APIs into a single set of Apifiny APIs. We even offer fee discounts.
Market growth: The boom in institutional interest of 2020-2021 validates the need for Apifiny.
Haohan says that a few years ago, many sophisticated market players would not touch crypto. Now players like Citadel don’t dismiss it as his CEO Kenneth C. Griffin explains that his initial point of view was wrong.
“I still have my skepticism, but there are hundreds and millions of people in this world today who disagree with that,” Griffin said.
“As we try to help institutions and investors with their portfolio allocation issues, we need to seriously consider being a crypto market maker.”
Innovation prospects: When asked where the markets are heading and how Apifiny will approach the changes, Haohan said the following.
“One is the rise of derivatives,” for speculation and hedging, as well as “NFTs and that whole metaverse concept,” which increase the dynamics of ownership and engagement in crypto.
Since Apifiny is more focused on institutional participation, the derivatives markets are where Haohan seeks to research and develop, as well as place funds raised through the SPAC.
“What we want to do is build a global crypto-trading network and we will do that by providing institutions – the whalers – with the most transparent access to the entire crypto market because they are the main contributors of liquidity in this space.”
With this liquidity, crypto markets can become “more efficient and healthier”.