Summary
Crypto market-making and trading service provider Flowdesk has raised $50 million in Series B funding, with participation from Cathay Capital, Cathay Ledger Fund, Eurazeo, ISAI, Speedinvest, BPI, and Ripple. Flowdesk, in collaboration with Jane Street, Virtu, and Flow Traders, serves as one of the liquidity providers for Grayscale’s spot bitcoin ETF. The funding round was closed near the end of last year, prior to the ETF’s approval. Flowdesk’s services likely involve selling bitcoin for Grayscale, and the firm’s CEO reported a spike in altcoin demand from existing crypto traders following the ETF approval.
Key Points
1. Flowdesk, a crypto market-making and over-the-counter trading service provider, has raised $50 million in Series B funding led by the venture arm of Cathay Capital. The funding round also included participation from Cathay Ledger Fund, Eurazeo, ISAI, Speedinvest, BPI, and Ripple.
2. Flowdesk, in collaboration with Jane Street, Virtu, and Flow Traders, serves as one of the four liquidity providers for Grayscale’s recently approved spot bitcoin ETF. This role involves regulating the buying or selling of bitcoin based on investors creating or redeeming shares of the ETF to ensure its price tracks bitcoin’s price.
3. The pre-funding requirement for bitcoin ETF shares means that liquidity providers like Flowdesk must allocate funds in advance to cover the trades. This aligns with the more regulated and structured approach of traditional financial markets and reduces the risk of default, compared to the instantaneous and decentralized nature of crypto trading.