The traditional investment banks distance themselves from cryptocurrencies. The volatility is too big, a reliable calculation difficult. But there are also the young, modern companies on Wall Street who live on this volatility. A special one is Jane Street.
A traditional trading floor does not exist on Jane Street. The corporate culture is young and refreshing. No suits, no ties. Founded in 1999 at the height of the dot-com bubble, the company employs 500 people and trades up to $ 13 billion per day in more than 2,500 investment products.
New in 2017 is Bitcoin. The image of the former traders in the heart of New York has changed a lot. Today, instead of the typical banker, young men with PhDs in computer science and mathematics sit behind the screens. They develop strategies and algorithms to benefit from short-term fluctuations and arbitrage deals. Cryptocurrencies are optimal for this. The fluctuation range is often three to four times that of conventional markets. The opportunity for arbitrage profits, ie risk-free by price differences on different stock exchanges, is many times greater.
In contrast, the trading volume of conventional equity markets is well above what Bitcoin achieves on a daily basis. Securities markets are perfectly matched and arbitrage is rarely profitable. The crypto markets are therefore opening up new opportunities for these companies.
Jane Street – high wages, hard hunts, but what is behind it?
How much Jane Street invests in Bitcoin, or even gains, is unknown. It is likely to be smaller relative to investments in traditional securities such as ETFs. These are still the main business. And generally, very little is known about the company. This is unusual for a company whose trading volume reaches new record levels every year. Only so much is said: The interviews are among the hardest on Wall Street and wages are among the highest.
The company is now increasingly turning to digital currencies. “If more cryptocurrencies emerge, we also want to invest there,” explains a spokesman for Jane Street. Several of these young companies are discovering the benefits of cryptocurrencies. The investment company DRW has been active in trading bitcoin since 2014 through its subsidiary Cumberland. Companies like Hehmeyer Trading, Virtu Financial and Jump Trading are currently following. BTC-ECHO reported a few days ago on the burgeoning interest of various representatives of the Old Economy. The comparatively small companies use the restraint of the big banks for themselves.