FinanceFeeds Podcast Ep. #6: Gold-i’s Tom Higgins talks efficiency in FX and inner workings of Crypto Switch
On its sixth episode, the FinanceFeeds Podcast welcomed Tom Higgins, the founder and chief executive of trading systems integration provider, Gold-i.
Gold-i is a household name within the FX industry, known for its MetaTrader plug-ins, FX and crypto liquidity management solutions, and business intelligence tools.
A frequent attender of trade expos, with maybe up to 100 conferences across the globe under his belt, Tom Higgins was at the most recent iFX EXPO Asia 2022 in Bangkok, moderating a panel discussion and enjoying listening to industry leaders’ views on a wide range of topics.
The interview with FinanceFeeds Editor-in-Chief Nikolai Isayev covered the evolution of the FX industry, the intricacies and challenges of Gold-i’s Crypto Switch™ and the ‘crypto winter’. They also grazed on fashion as they spoke about Higgins’ colourful attire and music.
Efficiency is the name of the game in FX
Tom Higgins knows the trading industry inside out. Having started his career in 1988 at PA Consulting Group, where he built his first trading platform, he moved to The IPE as CTO and then to NYSE Euronext as Head of IT Business Strategy. In 2002, he was at Reuters as COO Europe and Asia, and in 2005, he joined online OTC broker ODL Securities as CTO – his last executive move before founding Gold-i.
His long career in FX makes his views of the industry all the more valuable. He said the retail FX market was growing at a very high rate years ago, but it has sort of stabilized and flattened out. “You don’t see new brokers being created all the time”.
Now, the general focus is on efficiency: doing things as cheaply as possible, getting the best pricing, the most reliable systems, etc. The good news is that there are now many vendors, with good people and products that will cater to brokers’ needs, he said, as he included Gold-i on the list.
The team at Gold-i listens to clients about their pain points, including the risk management side, to ascertain what information they need access to in order to do their jobs efficiently and to be on top of unprofessional trading. “They’re exposed to everybody – so many trades and many traders. It’s impossible to control.”
It didn’t use to be like this. “When I started working in FX 20 years ago, we noted all the trades down on a piece of paper”. Times changed and the paper turned to a spreadsheet and it never stopped growing. “It became really obvious, it had to become automated”, Tom Higgins explained how Gold-i came about.
How Crypto Switch 2.0 works
Nikolai Isayev then enquired about Gold-i’s Crypto Switch – a project that started five years ago. Its first model integrated with nine exchanges to ensure a reliable feed, but Tom Higgins found early exchanges to be unreliable, riddled with latency, gaps in pricing, and terrible support.
That’s when Gold-i moved to the Crypto Switch 2.0 model: “We worked with market makers instead”. Gold-i partnered with a number of experienced firms from outside the crypto world who had created their own digital asset divisions. Higgins explained the process: pricing into the central engine, aggregation, customer ladder to better read the order book due to the different levels of depth, etc.
“We are not a venue. We are a platform. We are not a counterparty”. Gold-i provides technology to aggregate brokers, funds, exchanges (although many aren’t true exchanges) for the best possible prices. To do that, the firm offers 10 to 20 venues to execute against and it can be done in three different ways: daily settlement, positions against a clearing house, and the Prime Broker model (in crypto it’s a mix between PM and PoP because they also provide credit).
Crypto market drivers: 65% institutional – 35% retail
Speaking of crypto, the ‘winter’ has come but this time is different, Higgins noted, pointing to the fact that the market collapse in 2018 saw Bitcoin falling to a much lower price than this year, which sits around $20,000. Why? There was little institutional support at the time, but now the industry is much more involved.
The Gold-i CEO added that trading volumes are proportional to the price of bitcoin but it is no longer driven by retail traders as it was before. Now it is about 65% institutional.
What comes next? “We’ll see inbound leads for digital assets systems such as Crypto Switch because we believe the way digital assets trade is superior and so this asset class is here to stay. Financial institutions are now planning what they need to do moving forwards in order to develop or evolve their digital assets offering”.
Tom Higgins believes crypto will be integrated into consolidated trading platforms like any other asset class, especially once regulators allow it – “and they will”.
The interview also explored Tom Higgins days as a DJ, Pink Floyd, his early path toward trading technology, and travel tips ahead of the iFX Expo.
Sponsorship opportunities on FinanceFeeds Podcast
Episode #1 with 24 Exchange CEO Dmitri Galinov, Episode #2 with Autochartist CEO Ilan Azbel, Episode #3 with Your Bourse co-CEO Elina Pedersen, Episode #4 with Capitalise.ai Head of Sales William Klippel, and Episode #5 with Invast Global CCO James Alexander are available on all popular audio streaming platforms.
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