FalconX: How leveraging a riskless principal increases efficiency and lowers costs.

On Monday, Tesla announced it purchased $1.5 billion in Bitcoin to hold on its balance sheet. It  joins other publicly traded companies like Square, Microstrategy, renowned private investors like Tudor Investment Corporation and Stanley Druckenmiller, along with thousands of private corporations that have purchased Bitcoin as an inflation hedge.

Beginning in December, Elon Musk questioned whether there was enough liquidity in the market to execute over $1 billion Bitcoin purchase.

Over the past few years, we’ve seen the cryptocurrency market structure evolve significantly, with firms leveraging technology to facilitate large institutional purchases. FalconX works with over 300 of the market’s most sophisticated institutions, providing trading, settlement, and clearing across top cryptocurrency pairs.

On the backend, FalconX uses data science to access robust liquidity through a combination of lit liquidity pools (exchanges) and proprietary dark pools – combining the broader market’s liquidity into a single account for its clients. FalconX acts as a riskless principal dealer – meaning clients only ever interact with FalconX but get access to the broader market’s liquidity.

Great pricing: our technology and principal structure allows FalconX to deliver clients better pricing and execution quality than smart order routers or agency brokerages – which incur greater execution costs, slippage, and exchange fees. There’s no middleman involved; FalconX owns its own balance sheet, guaranteeing its customers access to deep liquidity.

Trading algorithms: curated to the client's needs – minimize market impact, minimize time for execution, minimize cost of execution, etc. To date, our Markets Team often saves clients 8% or more on using personalized TWAPs.

White-glove service: FalconX guarantees that traders can work with a single counterparty for simple, instant execution at a guaranteed price, with no risk of slippage or hidden fees. Our dedicated customer support team is available 24/7 to ensure that traders can access fast, secure and flexible post-trade settlement at any time, any day.

Discretion: FalconX can easily facilitate a >$1 billion BTC purchase orders using a wide range of personalized products, while preserving the privacy and anonymity of its clients to the broader market.

As we continue to see the market evolve and mainstream interest in cryptocurrency expand, we’ll see more and more large companies make large Bitcoin allocations. While this growth continues on the retail and institutional fronts, we also expect to see governments with BTC on their balance sheets in the coming years.

On February 10th, European Central Bank President, Chrisine Lagarde, stated it’s “very likely” that central banks will hold Bitcoin in the near future. From our perspective, the recent wave of institutional adoption is just the beginning

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