The Blockchain Terminal is creating a standardized storefront for developers and third-party vendors to distribute crypto trading applications to hedge funds and other institutional investors. It will, therefore, provide hedge fund users with institutional-grade data and execution for cryptocurrency trading, and a best of breed collection of applications.

How do we know that the hedge fund community wants our technology? Before we saw the proof from the long wait times we witness at events where we show off our terminal, we saw a number of industry trends that pointed us in that direction.

Hedge Funds Are Big on Technology

Technology solutions are currently disrupting the financial services sector at a fast pace, and the hedge fund industry has been a big part of that. The hedge fund industry spends $2.3 billion a year on technology. That number has risen steadily in recent years and is expected to rise at even greater rates.

In summarizing their findings on hedge fund technology spending in 2017, EY reported that “What is most apparent is that those who do not innovate and evolve will be left behind.” In a similar study released by KPMG in 2016, the authors summarized their findings by saying “What is clear is that fund managers expect to increase their investments into innovation going forward.” That is especially impressive given that one-in-five North American hedge funds have spent over $5M on technology each year during the past 5 years.

Gone are the days when hedge fund managers were able to move on a hunch or a bet. The rise of powerful new analytic and back-end tools has brought technology into the heart of investment decisions.

However, are they really interested in cryptocurrencies?

Evidence that Hedge Funds Are Eager for Crypto

A number of studies have shown that hedge funds have quietly begun investing into cryptocurrencies. A BarclayHedge survey of 119 hedge fund managers in September 2017 revealed that 24% of managers “responded that they either currently invest or plan to invest [in cryptocurrencies] within the next six months.”

Another study of investments into cryptocurrencies by 120 fund advisors confirmed that investors have had positive returns on their cryptocurrency investments. The author of one study reports that “The findings are consistent with anecdotal evidence suggesting that the returns attainable through crypto investments have no short-term match in legacy systems.”

The conclusion of the above studies is clear: hedge funds are interested in cryptocurrencies, and they know they can win in the space.

What’s needed is to provide them with the institutional grade tools they require in order to truly dig into the space.

The Opportunity for Developers

So how can developers take advantage of the opportunity the Blockchain Terminal has created? To open the doors as wide as possible to blockchain developers, we have created three classes of applications that we partner with.

Contained Applications

Blockchain Terminal Contained Applications are to be executed in the runtime scope of Blockchain Terminal hardware and its local resources. In contrast, Blockchain Terminal Metered Applications are designed for hosting independent of Blockchain Terminal hardware, while still registered for use with local APIs. In many ways, Contained Applications will live on their own but rely on Blockchain Terminal infrastructure for integration and other leveraged platform components: logging, persistence, and identity management.

2. Metered Applications

Blockchain Terminal Metered Applications are applications that can be listed for subscription and use within the Blockchain Terminal but will not be executed in the runtime scope of the Blockchain Terminal hardware and its local resource.

While the runtime of Metered Applications is to be hosted elsewhere in the enterprise, Metered Application registration, billing, and support will continue to be managed from the Blockchain Terminal after installation.

3. Linked Applications

Blockchain Terminal Linked Applications are to be displayed within the Blockchain Terminal Applications Store, but they will not be integrated. These applications may be registered with the Blockchain Terminal for product placement.

When users select a Linked Application, they will be brought to a non-integrated application in a different online location. These applications will be curated applications that are promoted to Blockchain Terminal users.

Conclusion

Each application available in the Blockchain Terminal will be the best of breed. We are committed to building out a robust developer program for third-party developers and vendors. Qualified developers can contact Gabriel Ortiz (go@cgblockchain.com) to get involved.

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