Demand for Bitcoin Analytics Surges Along with Its Price
Bitcoin is trading at all-time highs as investors pile into the world’s most well-known cryptocurrency. At the same time, demand for bitcoin data and analytics is also on the upswing, as demonstrated by today’s acquisition of TradeBlock by CoinDesk.
A single bitcoin (BTC) is currently worth nearly $34,000 on the open market, which is about a 400% increase from this time in 2020. As more investors look to invest in bitcoin, they’re looking for reputable data about their investments, and that’s where bitcoin analytics and data services come in.
CoinDesk is one of the leading sources of news and information about cryptocurrencies, including bitcoin, ethereum, tether, ripple, and many others. The New York City company, which is owned by the Digital Currency Group (DCG), also runs the industry’s largest conference, called Consensus.
CoinDesk monitors the price and volume of cryptocurrency trades at a handful of the biggest and most reputable exchanges. Because cyptocurrencies are traded across thousands of exchanges, an individual trader can find it difficult to determine a fair price.
TradeBlock, meanwhile, provide an array of services for cryptocurrency traders, including market analytics, order management, trade execution, and compliance tools. The company, which was partly owned by DCG, also manages a bitcoin index called XBX, which serves as “the reference rate for tens of millions of dollars of registered derivative products,” the company says.
Reference rates provide transparency and standardized pricing for investors accustomed to working in traditional capital markets. This is especially important as derivatives of crypto currencies like bitcoin make their way into exchange-traded funds and other traditional investment vehicles.
Grayscale Bitcoin Trust is one of the most prominent investment vehicles that uses the XBX. The Grayscale Bitcoin Trust (which is owned in part by DCG) enables investors to invest in BitCoin as a security without the need to actually buy and hold a bitcoin directly.
Terms of the acquisition were not disclosed.
CoinDesk CEO Kevin Worth said the acquisition of TradeBlock will help turn the company into the Bloomberg for cryptocurrency.
“Mainstream acceptance of bitcoin is accelerating right now as Wall Street wakes up to its potential,” Worth said in a press release. “With that has come an urgent need for the kind of robust data and professional tools that enable institutions to participate.”