By Uri Inspector, Staff Reporter
Thomson Reuters has made a strategic partnership with global cryptocurrency market data aggregator CryptoCompare to provide crypto data to the Eikon financial analysis desktop platform. The deal takes Thomson Reuters further into the crypto space, with CryptoCompare integrating its real-time order book and trade data for 50 leading crypto coins sourced from 65 global exchanges with the Eikon platform.
Traders using Eikon will be able to view real-time CryptoCompare data for actively trading coins, as well as market participant behaviour, from which they will be able to accurately predict price movements. CryptoCompare offers market and pricing data, trade data, order book data, block explorer data and social data on 5,000+ coins and 200,000+ currency pairs globally, bridging the gap between the crypto asset and traditional financial markets.
Having followed blockchain development for the past few years and after conducting a customer survey in January 2018 that revealed 20% of the 427 Thomson Reuters clients canvassed were planning to open a cryptocurrency trading desk within the next 12 months, Thomson Reuters decided to push on in this direction. In addition, a Thomson Reuters dashboard for Bitcoin that showed how prices shot up between October 2017 and March 2018 and displayed information on how Bitcoin was being traded on the CME and Cboe, proved to be the company’s second most viewed currency dashboard in that period – the Euro was first, with pounds sterling third.
Sam Chadwick, director of strategy in innovation and blockchain at Thomson Reuters, says the partnership with CryptoCompare marks ‘a clear commitment to the crypto space, not just a toe in the water’. On the Thomson Reuters customer survey, he comments: “This made us realise that the ‘Blockchain good, Bitcoin bad’ hype in the media that suggested institutional traders wanted nothing to do with cryptocurrency wasn’t true. Organisations had been paying a lot of attention to distributed ledgers and smart contracts, but little to crypto, and it became clear we had to listen to client interest in this space.”
A relationship between the partners started after CryptoCompare’s sponsorship of Thomson Reuters’ hackathon for blockchain developers in September 2016. Faced with demand for pricing coverage of major coins, Chadwick says it made sense to partner to access the required information.
He explains: “Beyond CryptoCompare, our other possibility was to go to other providers that didn’t have the same rigorous data quality standards and scope. Our decision was also made at a time when crypto exchanges jumped up and fell down again, with many changing their technologies and the constructs of their APIs. As a large organisation, we couldn’t onboard exchanges that may not be there tomorrow. It was difficult for us to manoeuvre nimbly in this landscape, which is why we needed to partner.”
CryptoCompare has previously provided data to Yahoo and has entered a similar strategic relationship with New York investment management firm VanEck, to which the company provides it MVIS CryptoCompare Digital Assets 10 Index that tracks the performance of the 10 largest and most liquid digital assets.
Charles Hayter, CryptoCompare CEO, says the business has garnered a reputation for reliability and of being ‘an old hand at understanding the industry’ due to its continuity in the market since it was founded in London in 2014. “This, as well as the granularity and scope of the data we offer, may explain why Thomson Reuters chose to partner with us,” he suggests.
He adds: “As cryptocurrency is a nascent market, there is a lot of inconsistency. Specialist knowledge is needed to make sure you have the scope of data and completeness that will allow you to understand the subtle nuances of the market. What we do is aggregate all the data in the virtual world of crypto into one place, essentially replicating the model of traditional data vendors.”
In terms of the quality of data CryptoCompare can provide, he says: “Our infrastructure is connected to most major exchanges for individual trade data and we have basic building blocks to build up data by the minute or by the hour. It is important to have this level of granularity through time to see shifts in the market, the frequency of trades and so on. This offers a huge amount of market maturation.”
CryptoCompare has a core team in London, as well as employees in Romania, Portugal, Germany and Hungary. It says the company’s competitive edge is its holistic approach to data across markets globally. Hayter says: “Exchanges are evolving quickly, with some that last year ranked top now number 10 in terms of volume. This is due to localised conditions.
“You see a pop and drop in an EU jurisdiction as the market saturates and cryptocurrencies reach fever pitch. This is what occurred in South Korea, which is why it is now trying to temper exuberance and bring in regulation to stop that level of mania. What we saw in South Korea was capital control, arbitrage opportunities of up to 50% and gaps called Kimchi Premiums (the gap in cryptocurrency prices in South Korean exchanges compared to foreign exchanges) that couldn’t be closed. This can distort markets, so it is worth having a holistic approach to data across markets, which is why we have connections to Korean and Japanese exchanges.”
For Chadwick, Thomas Reuters Innovation and Blockchain team, and the wealth management firms they have spoken to, it is clear that the potential of cryptocurrency goes beyond how much Bitcoin you’re holding. Chadwick says: “Tokenising traditional assets and reprinting those in a client’s portfolio opens up a whole world of opportunity”.
This has lead him, for example, to invite Swiss startup SMART VALOR, which is developing a marketplace for cryptographic tokenised assets, to join Thomson Reuters incubator. He explains: “The initial liquidation of your asset and tokens is not really the interesting bit, you can do that by various mechanisms today. This is a secondary market for those tokens, that can give customers more insight into the price of an asset.”
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