Ex-Citadel execs raise $50M for high-frequency crypto trading platform

Portofino’s backers believe that access to high-frequency trading, or HFT, could bring more hedge funds and institutional investors into crypto.

Cryptocurrency startup Portofino Technologies has officially launched its high-frequency trading platform for digital assets, securing major funding from venture capital firms in the process. 

In launching its platform, Portofino disclosed that it had raised $50 million in equity funding from Valar Ventures, Global Founders Capital and Coatue. Although Portofino didn’t disclose how the funding will be used, the company has been active on the hiring front, having recruited over 35 employees across 5 global locations.

Portofino was founded in 2021 by former Citadel Securities employees Alex Casimo and Leonard Lancia. The company is building crypto-focused high-frequency trading technology, which is mainly used by hedge funds. While the company is only now coming out of stealth mode, it claims to have traded billions of dollars across centralized and decentralized crypto exchanges.

High-frequency trading, or HFT, refers to automated trading platforms that are typically used by large financial institutions to execute a large batch of orders at extremely high speeds. These platforms rely on complex algorithms to analyze market trends and trading opportunities that can be executed in seconds.

Hedge funds are tasting a bit of honey.

A recent report by PwC reveals a third of the 89 surveyed traditional funds are investing in digital assets. https://t.co/Tm4uNEZo5V

— Cointelegraph (@Cointelegraph) June 9, 2022

On the crypto front, HFT strategies can now be executed on decentralized exchanges, or DEXs. Unlike centralized exchanges, DEXs offer much faster trading speeds and new arbitrage opportunities. Portofino’s HFT technology is looking to build on these capabilities by increasing access to liquidity.

Related: Fixed interest rates to create a DeFi 2.0 for institutions, says former bank exec

Hedge funds and other institutional investors have shown a keen interest in cryptocurrencies, but overall adoption has been slow due to several factors, including regulations and a lack of infrastructure. As the head of crypto investment manager Apollo Capital told Cointelegraph:

“No one wants to be the first into something like this. Because if you’re the first one and things go wrong, then there’s a career risk. That will flip at some point to the opposite.”