 From New York, it's theCUBE, covering Blockchain Week. Now, here's John Furrier. Hello everyone, welcome back. I'm John Furrier, host of theCUBE here in New York City for Blockchain Week, New York. Also part of the Consensus 2018 event. Wrapping up day three, we've been rocking and rolling all the action and cryptos here from business models, financing, technology change, and a lot of demos. It's been great. My next guest is Alex Scarsini, who's the president of Edgewater Markets. Great to see you. Thanks for coming on. Thank you, thank you very much. We're excited. So we were chatting about a lot of the capital markets and then the go-to markets for these companies, and I got to say, the feedback here at the show is the demos are kind of sucky, because everyone's working on the backend technologies. So it's the evolution, but you're starting to see the technology having a real impact. Of course. What are you working on? Take a minute to explain what you guys are doing, and then we can chat about the general market. Sure, sure. So Edgewater Markets, we are developing what we think will be the preeminent platform for the institutional market, purely institutional market, that'll enable sophisticated investors to be able to buy and sell all the digital currencies, or at least in the first stage of our rollout, the 10 or 15 most liquid currencies, in the same manner that they transact their currency business today, which is efficiently at low cost, in a low latency environment, and with a A to Z turnaround of trade processes from the initial buyer sell to the confirmation process. We've done this before at Edgewater Markets. We do it in the currency business. We have a one-stop shop platform where our clients come to us and efficiently access global liquidity for the currencies they want. In the market that we have today, it's virtually impossible for the institutional segment to get in and get involved in a scalable manner. There's just too much dislocation globally in terms of exchanges, in terms of collateral that needs to be posted or not, in terms of accessing rates in a low latency environment. None of this exists. So is it their problem that there's too much time to do work, is it, or mechanisms aren't in place? What's the real frustration that you guys are solving? I mean, you mentioned dislocation, be specific. Is it the time it takes, the hassle? No systems in place? Well, imagine you're a large institutional trader and you wanted to buy 1,000 units of Bitcoin. Yep. 10 million dollar lot, or 8,500 dollar lot. You'd have to go and check prices on 20 different exchanges, where you can buy three cheaply, where you can buy the next four cheaply. By the time you look and figure all this out, the price has moved. Yeah, exactly. It's impossible. Moreover, our clients want to buy 1,000 lots, and they may very well want to sell them out in 30 seconds. They don't want delivery of the coin, they don't want to deal with cold storage, warm storage. They want to speculate on the movement of these digital currencies, the same way they do in Darien, Eurodollar, et cetera. So they need to be able to buy their interest in one place efficiently and at the best price. It's a great model. There's so much value there. How's it work, and how's it coming together? So you got to go set up what all the market making deals, so you have to set up the connections. What do you guys bring into the table? How does the platform work behind the scenes? Well, the good part about all this is, we've done it before. We've been in business for 10 years. We've set up offices globally in London, Singapore, New York, Chicago. We're in Mexico City as well. We have servers in each one of these locations. So we are already a very low latency provider of liquidity. And we already have a like product for the FXI. We have obviously a smart order routing system. We have a central limit order book. We have a pricing engines. We have algos. We've already developed a lot of the processes that we will need for this new product. The most important part of the equation for us is we have 300 active institutional clients that are waiting for this product. That's why we have a tremendous advantage. So what changes are you making for crypto? So you got the great leverage from your previous experience. Check, awesome. What's the crypto tweak to your model? What's the key? So the market has yet to solve for the custodian part of the equation. In today's world, institutions, and I'm talking about the household names in the macro space or the high frequency space, most of, I would say 99% of the institutional space deals in the name of their PB, Prime Broker, Goldman, Morgan Stanley, et cetera, as do we. Now these exchanges are what we call the liquidity providers. You would have to go up and literally set up an account with each one of these exchanges so you can access that liquidity. It's completely inefficient. So what we aim to do in the absence of a solution in the next year, what we plan to do for our rollout is to open those accounts ourselves and have that leverage, sorry, have that collateral with each one of these exchanges. Obviously we'll get leverage. There's going to be some cross-pollination of products between exchanges at some point, the way you have it today between a London exchange in the equities world and a New York stock exchange where they cross-pollinate some of their liquidity pools. You will see that in exchanges throughout the world and you'll also see some consolidation in that space. So we're going to put up the collateral. We're going to deal with the exchanges. We're going to make sure that we do the post-trade processes on behalf of our client. Our client comes to us, buys 100 units and sells them 30 seconds later and he's either made money or he's lost money and that just gets netted out at the end of the day or at the end of the week, depending on the agreements that we have with our institutional clients. I mean, I look at some of the transactions that take such a long time to get stuff done because it's just colluding right now. I mean, it's really a mess, it's a mess. It's exciting that you guys are doing this. Well, there's a need for it. I mean, there is obviously, the market is growing tremendously fast. I mean, it's evolved just in the last year. We've evolved from some concepts that were in the preliminary stage to a real demand for a product, for an institutional client base that is dying for a new product in this environment, meaning the currency markets are very quiet. The bond markets, although they're picking up or percolating right now, are very quiet. This is an area that gives the institutional traders and speculators a chance to arbitrage, to produce alpha, and to do it efficiently, they need a product and we're there for it. Alice, how do people get involved? Obviously, they're lining up, they're waiting for the mouse trap to be built because it's a better mouse trap, obviously, than what's out there. What's next for you guys? How do people get involved? They just call you up at Edgewater Markets as their front end website. How do they contact you guys? Well, yeah, certainly we have a website. We're in the process of putting together a product we think will be ready in the next three months for a beta rollout, where we've got all hands on deck building it out. We have a handful of clients that have agreed to beta test it for us, so we do think we're ahead of the curve. I've seen a lot of other companies that are trying to do what we do, and we always believe that in the absence of a real clientele that demands the product, it's tough to build what you don't know you'll be asked to build eventually. So, our clients are looking at our product, giving us live feedback today as we speak, and these aren't small institutional clients. These are your household names in the macro space. These are the big boys. They need it. And so, we think we'll have something ready in the next few months. Right, Alice, thanks for coming on theCUBE. Really appreciate it. Good luck tonight, and continue the events here, and great job, we need that. Right, thank you, thank you very much. Thank you for having me. Liquidity is critical, marketplaces are being developed, you got two-sided marketplaces, you got cryptocurrency. This is a new, exciting product at many levels. Financial obviously here with Alex, technology, business model, all covered on theCUBE here. I'm John Furrier, thanks for watching. More coverage here in New York City after this short break.