A cryptocurrency dealer project by the name of SFOX, backed by Nathan Blecharczyk, a co-founder of Airbnb has finished an initial round of funding that has raised around $22.7 million. SFOX is a project designed to provide trading services to institutional investors, making the entire process seem a little friendlier and more fruitful for large institutions that wish to invest in cryptocurrencies.
According to Coindesk:
“Founded in 2014, SFOX operates as a trading hub for institutional investors, high-net-worth individuals and family offices. The firm helps these high volume traders fulfill their buy and sell orders by executing them through its integrations with different cryptocurrency exchanges. SFOX aims to minimize the impact of high volume trading on the cryptocurrency market, while boosting trading liquidity – ‘one of the most significant barriers to institutional cryptocurrency adoption,’ according to Arjun Sethi, co-founder and partner at Tribe Capital.”
Furthermore, according to Akbar Thobhani, the CEO of SFOX:
“We continue to observe sustained and increasing demand from institutions that want to include cryptocurrencies as part of a diverse portfolio but are reluctant to do so because of uncertainty and volatility.”
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What is stopping institutional investment?
Well, as Thobhani states, uncertainty and volatility are some of the major factors contributing to a lack of institutional investment. Companies know they can make money with crypto, but as it stands the risk is too high. Platforms such as SFOX however offer to foster a safer environment for institutions, by providing an easier to use service and further protection for institutional investors. Price volatility isn’t such a risky to them, as traditional stocks hold this risk too, however volatility from manipulation and fraud is, therefore these institutions need protecting against this.
Therefore, we can assume that the money raised by SFOX in this first round of funding will go on to develop this further, creating a trading platform built bespoke to suit the needs of potential institutional investors.
As stated above, one concept generated by SFOX is to allow transactions through multiple exchanges in order to get their investors the best rates possible, therefore we should assume that some of this funding could go into the generation of new partnerships between SFOX and exchanges that could be open to integrating with such a service, a service that would in turn host great benefits for the exchanges too.