Cashed-up DigitalX says it’s ready to deal back in as crypto market maker
Link copied to
Digital currency expert DigitalX has announced it will play the role of “market maker” on approved cryptocurrency exchanges.
A market maker assumes the risk of holding a certain number of shares in a security to facilitate the trading of that security. In this case Digital X buys and sells cryptocurrency to trade at a publicly quoted price.
Cryptocurrency refers to digital money designed to be secure and anonymous. There are about 1000 different types of cryptocurrency — of which BitCoin and Ethereum are the best-known.
DigitalX — which has recently been advising companies that want to launch their own cryptocurrency-backed offerings — will provide liquidity to cryptocurrency markets such as Bitcoin, Ether — and tokens of affiliated companies Power Ledger and Etherparty.
DigitalX (ASX:DCC) took a step back from the trading desk last year due to a lack of funding — but it’s returning to the game with the value of bitcoin on the up and an increasing public interest in cryptocurrencies.
The company believes it is now well capitalised to resume the role, with $5 million in the bank, $10 million in bitcoin and $2 million across Ether, Power Ledger and Etherparty tokens.
“The board of DigitalX has initially approved the use of up to $1 million for the provision of market making services,” chief Leigh Travers told investors.
“Our strong financial position, together with the appreciation in the value of Bitcoin, has allowed us to reignite this service.”
Today’s movements continue DCC’s upwards trajectory, reaching 52-week highs of 27.3c in lunchtime trade, up 18 per cent on the news since market open.
Compared to its June low of 2c, the company is trading at a premium of more than 1500 per cent.
Even the federal government is getting in on the bitcoin fanfare. Australia’s so-called ‘bitcoin bill’ was successfully passed through Parliament which regulates the bitcoin and cryptocurrency industry in a similar way to banks.
“DigitalX is pleased to be at the forefront of this development and expects further positive developments in the marketplace including stable, commercial relationships with banks and strong consumer protections for customers of digital currency businesses, which will include DigitalX,” Mr Travers said.