One of the World’s Largest Investment Firms Is Bullish on Crypto and Big on Game Theory
Susquehanna International Group (SIG) is leading the pack of large institutions that are offering clients the ability to buy and sell Bitcoin. Financial giant SIG, based in Bala Cynwyd, Pennsylvania, makes markets in conventional securities by using quantitative research and proprietary trading technology developed by the firm. They provide liquidity in almost every exchange-listed option market, including commodity, energy, equity, exchange traded fund (ETF), index and futures option markets. Plans to expand their cryptocurrency business are in step with other big players on Wall Street.
The New York Times reports that the privately owned company will open crypto trading to an initial group of 500 clients, after having built up a trading desk over the past two years to trade large volumes of Bitcoin and altcoins in private deals. In addition to trading futures, Susquehanna will allow clients to trade Bitcoin, Bitcoin Cash and Ethereum.
“We believe that this technology and this asset class is going to change some facet of financial services, and we think it is going to exist forever,” said Bart Smith, head of Susquehanna’s digital asset group.
The firm is known for its use of game theory in developing trading strategies. It uses a range of games – poker, chess, backgammon, Magic: The Gathering, The Settlers of Catan, SET, The Resistance, Hanabi, Power Grid and Dominion, among others – to hone skills that they can apply to complex financial markets.
Bitcoin itself is a network where miners need to behave and follow protocols to reap rewards and ensure the integrity of the platform.
Cryptocurrency traders and gamers continue to be linked both in and out of the office. A natural affinity between the two groups is evinced in research that shows a large percentage of Millennial gamers are invested in cryptocurrencies, particularly Bitcoin and Ethereum.
Susquehanna’s move into crypto trading comes amidst a flurry of similar initiatives by Wall Street heavyweights that are exploring the integration of cryptocurrencies or are developing cryptocurrency products to augment their business.
Goldman Sachs is building up a trading desk. Nasdaq technology is powering digital asset exchanges Gemini, VCTRADE and DX.Exchange, and CEO Adena Friedman has stated that Nasdaq is considering building a crypto exchange. Fidelity Investments is also reportedly scouting for developer talent to build a crypto exchange.