Coinbase To Unite Two Scorned Corners Of The Financial Market

Can’t trade your cryptos fast enough? Just co-locate your servers at the giant bitcoin exchange.
By Mike Cauldwell ( [Public domain], via Wikimedia Commons

By Mike Cauldwell ( [Public domain], via Wikimedia Commons

There are few things in finance as feared and reviled and misunderstood as high-speed trading. Cryptocurrencies are one of them, even if Michael Lewis hasn’t written a book about them yet. (Stay tuned: One of his muses has weighed in on the topic.)

Until now, however, there hasn’t been a way to really piss off the Wall Street dads by combining the two, which is to say trading the highly volatile non-existent non-currencies really, really fast. However, if you load your servers into the trunk and drive them to an office in San Francisco, your dreams of sticking it to the man thusly can be realized.

San Francisco-based Coinbase plans to introduce “low-latency performance,” the company said in a blog post, using a term in the exchange industry that means extremely fast processing times.

Coinbase also said it would allow trading firms to place their servers directly in its data center, a practice called co-location….

“The stock exchanges in the equity market were the ‘arms merchants’ that sold speed advantages to HFT so they could be faster than traditional investors,” Mr. Saluzzi said in an email. “It looks like Coinbase wants to be one of the arms merchants for the crypto world.”

Big Bitcoin Exchange Welcomes High-Speed Traders [WSJ]
Steve Eisman of ‘The Big Short’ Bashes Cryptocurrency: ‘I Don’t See the Purpose of It’ [WSJ]