LONDON — UK foreign exchange trading venue LMAX Exchange is launching a cryptocurrency exchange for institutional investors. LMAX said it developed the new “LMAX Digital” venue at the request of clients who wanted access to cryptocurrencies like bitcoin and ether.

Clients will be able to trade bitcoin, ether, litecoin, ripple, and bitcoin cash on the exchange, which will operate 24 hours a day and 7 days a week. David Mercer, CEO of LMAX Exchange, said in a statement: “We are furthering the legitimisation of the crypto currency market by offering institutions a platform on which to acquire, trade and hold crypto currencies securely with high quality, deep liquidity.”

Banks and hedge funds have been reluctant to buy these new assets given the difficulties in holding and securing them. LMAX Exchange was launched in 2010 as a multilateral trading venue for foreign exchange and has transacted over $10 trillion of fiat currency since launch.

Mercer said: “We’ve applied everything we’ve learned in the institutional FX market to LMAX Digital, to create a fundamentally improved, secure digital exchange based on our proven trading technology, market-leading liquidity and transparent and precise execution.” The launch of LMAX Digital comes just days after JPMorgan created a new position of head of crypto strategy and weeks after Goldman Sachs signalled its intention to begin trading bitcoin-linked products.

Crypto hedge funds have also been springing up, with an estimated 167 launched in 2017 according to research firm Autonomous Next. Crypto hedge funds have largely relied on “over the counter” market makers to purchase cryptocurrencies rather than transparent and centralized exchanges. Read more from…

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