Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Crypto Facilities, a cryptocurrency futures provider (acquired by Kraken exchange), has witnessed an exponential growth in its user base and the futures trading volumes for some of the top cryptocurrencies.
Last month, U.S.-based crypto exchange Kraken acquired the U-K.-based cryptocurrency futures provider Crypto Facilities in a $100 million deal. Since then, Crypto Facilities has witnessed an exponential growth with the futures trading volumes shooting over 500%.
Kraken’s huge clientele base provided a major trigger for Crypto Facilities’ growth registering a significant number of signups. Kraken said that it has registered $1 billion in futures trades over a 30-day timeline. Sui Chung, the subsidiary’s head of indices and pricing products, told CoinDesk that these futures trades were across all of its five products: Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and XRP.
Chung admits that Kraken’s acquisition of Crypto Facilities has played a crucial role in determining this success. He said:
“I think obviously having the support of a major U.S. exchange helped and obviously Kraken bringing our product set to a very loyal user base … that Kraken branding carries a lot of weight … and also the fact that because we run contracts on the major five coins and take collateral on the major five coins … we pay out in [helped].”
Minor Coins Witness Major Volume Jump
In further explanation, Chung gave a glimpse of how Crypto Facilities measures the trading volumes. Crypto Facilities measures the trading volume for a five-day period before the acquisition on February 4. Kraken then compared the volumes with the five-day-period after the acquisition. It found the trades jumping by over 500%.
Chung said that the period acts as a good yardstick for the rest of the month. Undoubtedly, Bitcoin is the most popular digital currency and contributes the largest trading volumes. However, Ethereum and XRP have also registered good volumes. More important, Chung notes that even Litecoin and Bitcoin Cash are showing significant progress. He said:
“Outside of bitcoin and ether, one of the strengths of Kraken is obviously running some of the most liquid markets for Bitcoin Cash and Litecoin, and that’s translated over to our market as well”.
While commenting on the token liquidity aspect, Chung added:
“On average [looking at] the five days before the announcement and five days after, the liquidity for our contracts increased by over 200 percent and some of the minor [coin] contracts increased by over 1,000 percent.”
Kraken also notes that the user-base for Crypto Facilities has grown by 400 percent over the last month. Interestingly, none of the new customers were from the United States. A majority of them were from the Asian continent and Europe.
“We don’t allow any U.S. nationals or corporates to trade on our market because that is prohibited by the [U.S. Commodity Futures Trading Commission],” Chung explained.
Customer Feedback is the Key
Chung says that the key to Kraken’s growth is that the platform is open to its customer feedback. He notes that its user base is open about their members’ requirements.
“Kraken users are very vocal about what products they want to see and what features they want to see, [and] that feedback is very useful for our product guys,” he said.
The feedback includes working on a user-friendly interface and the availability of advanced features and tools. As per the user feedback, the product team at Crypto Facilities make significant changes to the platform.