Founders Fund, a venture capital firm backed by billionaire Peter Thiel, known for its early investment in Facebook, has reportedly made another early-stage investment. This time it is Tagomi – a startup that aims to be a cryptocurrency version of a traditional broker-dealer for wealthy institutional investors, family offices, and individuals.
Executing large orders within crypto markets is still an arduous process due to the decentralized nature of the industry. There is no central connection between the platforms and many of them impose limits on deposits or withdrawals.
Another significant issue is the notorious volatility of the crypto sphere, which makes every second while executing a large trade even more valuable. Tagomi plans to overcome this by implementing a smart order routing system, which sends the orders simultaneously, thus saving time and executing trades across different trading platforms.
Not much is known about Tagomi and the development is in such an early phase that even the name is not confirmed yet. What we do know is that it was co-founded by Greg Tusar, a well-known and respected person in trading business, who previously served as head of electronic trading at banking giant Goldman Sachs. This follows a growing trend of Wall Street executives leaving the financial sphere to start or join crypto companies.
Tagomi gathered around $15.5m in funding so far, while it remains unknown how much of that comes from the Founders Fund. It seems that it might be a significant amount though, as Napoleon Ta, a partner at Founders Fund, has been reportedly listed among the directors of Tagomi.
Peter Thiel has been an outspoken proponent of the crypto industry, having made a significant investment in bitcoin in its early days. On behalf of Founders Fund, which manages a portfolio worth approximately $3bln, he also made investments in Polychain Capital and Metastable Capital, hedge funds with an emphasis on digital currencies.
In an interview last month with the Economic Club of New York he claimed that “I would be long bitcoin, and neutral to skeptical of just about everything else at this point with a few possible exceptions. There will be one online equivalent to gold, and the one you’d bet on would be the biggest.“
Tagomi is the latest of companies, trying to lead institutional investors into crypto markets. Last month Gemini, a crypto exchange ran by the Winklevoss twins announced a service, which will allow investors to make big trades outside of the firm‘s order books. Goldman Sachs-backed Circle has recently raised a trade minimum for bitcoin to $500,000, reacting to increasing institutional demand.
Additionally, rumors of the biggest brokerages such as Morgan Stanley or Goldman Sachs opening the crypto trading desks have been floating around for quite some time and it seems like it is only a matter of time before they come to fruition. Simplifying the entry along with introducing clear regulation remain two of the main tasks on the path of widespread adoption for the crypto markets.
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