Page 2 of 2

Institutional investors are sidelined as the lack of regulation poses high risk. Thus liquidity is too thin to make it attractive to the institutional client.

Algo Trading Test Phase

A key strategic pillar of the Zug-based fintech is reflected in the name Cryptalgo: a system called Algotrader, which combs the global crypto exchanges for pricing spreads. Currently test phases are being run with real currencies, but will be ready when the markets are properly developed.

Cryptalgo believes this is only a question of time. «We expect the crypto will mature and develop more dynamically as soon as regulation and compliance are globally coordinated and existing problems are solved», said Portillejo Hoyos.

Ex-Bankers in Team

This certainly isn’t a pipe dream since Portillejo Hoyos and his team are mostly senior bankers and bring together considerable know-how for the creation of a crypto prime broker.
Hoyos was a senior manager in the global derivatives business at UBS. The head of the board is former Saxo executive Tobias Straessle.

The advisory team comprises financial experts like John Winter, ex-head of Barclays’ corporate banking and Michael Huttman, head of Millennium Global, a hedge fund service provider.

Hedge Funds as Clients

In April, Cryptoalgo entered into a partnership with Elysium, a currency and futures trading platform, with the goal of giving existing Elysium customers access to the crypto markets.
The customer base which Cryptalgo is eyeing, according to Portillejo Hoyos, are hedge funds, asset managers and proprietary traders. He also believes crypto currencies will emerge from their niche status to become an investment class.

«Demand will develop from private banks, asset managers and their clients», he said. «They are looking for diversification in the alternative investment categories which don’t have the classical correlation to the traditional financial and interest-rate markets or economic growth.» 

The main demand will emanate from hedgefunds, which will establish crypto currencies as a new investment class.