The high-frequency trading (“HFT”) industry has continued to accelerate since Michael Lewis’s Flash Boys exposed HFTs who “scalp” small amounts of money from trades.
Back in 2011, the computers featured in Flash Boys could execute a trade in five microseconds (or five-millionths of a second). However, the FT has revealed that the data is now moving 60x faster. The transmission has gotten so fast that they are bumping up against the limits of the speed of light!
A finance professor at the University of Edinburgh recently explored the comical implications of the HFT war for speed. In one example, he investigated HFTs fighting in a Chicago suburb, trying to put their towers as close as possible to a nearby data center run by CME.
But it’s not just HFTs that remain controversial here. The big stock exchanges benefit tremendously by charging massive fees to connect. IEX, the upstart exchange featured in Flash Boys, claims to charge 10x to 19x less for access to market data. To call attention to the issue, they are even commencing with their first TV ad on CNBC.
So as the Masters of the Universe race towards trading at the speed of light, we all need to remember that until time travel becomes a reality we're all kinda stuck with the physics we've been dealt with - namely, that light can only move at 30cm a nanosecond.
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SPEED OF LIGHT
Finance v physics: even ‘flash boys’ can’t go faster than light - Back in 2011 the computers used by the “flash boys” took around five millionths of a second to cut a trade. Today, the data is moving 60 times faster, taking only 84 billionths of a second (nanoseconds). Read more
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Fintechs help boost US personal loan surge to a record $138 billion -The unsecured personal loan market in the US increased 17% last year, reaching $138b. Fintech companies issued 38% of all U.S. personal loans, up from just 5% in 2013 (according to TransUnion). Read more
Coinbase acquires blockchain-tracking startup Neutrino for an undisclosed price - As part of its effort to offer more diverse crypto assets across borders and become the "Google of Crypto," Coinbase has acquired Neutrino which will help it conduct blockchain intelligence to beef up its compliance monitoring across various protocols. Read more
"Mobile phones will become banks." As Mexico pushes mobile payments - In a nation where more than half the population is unbanked, Mexico's new leftist government recently announced it is planning a digital payments system that will allow citizens to make and receive payments through their smartphones free of charge. Read more
This legislation could force stores to take your cash - As the world moves towards cashless payments using cards or mobile devices, regulators in several US states are pointing out that an outright ban on cash discriminates against those without credit or bank accounts, and raises concerns about privacy and data security. Read more
Pantera has raised $125m for its third crypto fund - The target size for the VC fund is $175m and Pantera's is looking to support 30 to 50 companies with an expectation there will be a large shift to equity versus tokens as the primary investment mechanism. Read more
One crypto fund says don't be fooled - bottom is not yet in - Alex Sunnarborg, co-founder of Tetras Capital, a NYC based crypto HF with ~$30m in AUM, is not convinced by this week's 20%+ crypto rally. While skeptical on prices, he is paying most attention to Grin (the latest non pre-mined privacy), the Fidelity crypto platform roll out in March, and more penalties from the SEC to rain down on past ICOs. Read more
Apple, Goldman Sachs team up on credit card paired with iPhone - Apple and GS hope to lure cardholders by offering them extra features on Apple's Wallet app. While Apple already takes a small cut through Apple Pay, it would potentially get a bigger slice of the fees from it's own card. Read more
Bloomberg Enterprise Access Point expands to include alternative data - Bloomberg is now making alternative datasets available to customers through the company's Enterprise Access Point. Some of the alternative data providers include Thasos, Apptopia, TipRanks, PredictWallStreet, RS Metrics, Orbital Insight, Predata, Evaluate, and Symphony Pharma. Read more
Alan - Paris based health insurance startup has raised $45m of Series B funding from Index Ventures and DST Global. Read more
Capitalise - UK based platform for SMB accountants to access analytics and resources has raised $4.6m in a Series A funding round led by QED, with participation from Hambro Perks and Gauss Ventures. Read more
CipherTrace - SF based blockchain and cryptocurrency security firm has raised $15m in equity funding led by Aspect Ventures, with participation from Galaxy Digital, Neotribe Ventures, and WestWave Capital. Read more
Iwoca - London based business lender raised £20m series D equity funding round and £130m in debt capital from Augmentum Fintech and NIBC. Read more
Rabbet - Austin based construction finance platform has raised $8m in Series A funding with participation from Goldman Sachs, QED, and Camber Creek. Read more
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