Markets

BitGo brings on trading executive to solve industry ‘pain-points’ as it eyes new opportunities to lure institutions into cryptocurrency

Quick Take

  • BitGo has brought on a high-frequency trading executive to make crypto look more like Wall Street
  • Nick Carmi is joining from Tower Research as head of financial services
  • The hire is another sign BitGo is looking to expand outside of its sleepy custody business and is flirting with new corners of the crypto market. 

“When I trade dollars against bitcoin, why does it have to be this difficult?”

It’s a question Nick Carmi wants to grapple with in his new seat as head of financial services at cryptocurrency custody firm BitGo.

The 20-year trading veteran and former global head of FICC trading at Tower Research says he will help BitGo expand its footprint into the financial industry to add profitable services on top of its flagship custody business, which reportedly stores approximately $2 billion in crypto on behalf of hedge fund clients.

But Carmi and his duo of public relations aides were shy to outline specifics of the business Carmi will build-out in his new position. For now, it seems his primary role will be to brainstorm where to focus the firm’s next venture.

“I am going to continue to educate myself on BitGo’s custody products and reach out to my old counter-parties and clients in the FX world to talk about the pain-points and explore what the industry is lacking and then create a blueprint of things we can solve,” Carmi said. 

Indeed, the pain-points in crypto market structure are plentiful. For instance, trading firms and other investors in the market have been wary of exchanges known for slippage and being hacked and slippage. Other issues include the lack of a clearinghouse and prime broker firms – middlemen which sit at the centre of Wall Street. 

“If you look at the big banks, JPMorgan and Citibank, for instance, they make money in trading and investment banking,” Carmi said. “They make a lot of money also in clearing, settlement, custody and providing leverage and creating products clients need,” he added, hinting at opportunities BitGo might be eyeing in the future. 

“When I take a step back and put my 25-plus year trading hat on, I can see a lot of things are missing.”

BitGo over the past year has been dipping its toes into new waters, inking a partnership with Genesis Global Trading, for instance, which would allow its clients to make trades via Genesis without having to move their coins out of storage. Elsewhere, the firm partnered with a slew of decentralized exchanges to roll-out ERC20-version of bitcoin

Indeed, the custody business in crypto is becoming increasingly competitive as exchanges, such as Coinbase and Gemini, continue to expand their own offerings, and startups such as California-based Anchorage look to take a piece of a shrinking revenue pie.

Carmi will report directly to the company’s CEO Mike Belshe. Belshe previously noted in an interview with The Block that the firm wants to build a ‘virtual order book’ that would allows its clients to trade across multiple venues.