The global market for digital assets is estimated to be northwards of 300 billion, and while there are many digital coins on the market, traditional investors have focused primarily on Bitcoin, thus losing out on exposure to lsrge segment of the digital asset market. Altonomy fills a gap in the market through its OTC sell-side trading desk that provides more liquid options for digital assets. Altonomy caters to the “alternative economy” by instituting a specialized framework to analyze digital assets and help its clients get returns on their investments. Altonomy has worked with over 60 crypto exchanges, OTC partners, and stablecoins thus far since launching in 2018.
AlleyWatch spoke to Altonomy cofounder Ricky Li about the rise of Altonomy, the company’s future plans, and recent round of funding.
Who were your investors and how much did you raise?
Altonomy closed on $7M in seed financing, which was led by Polychain Capital, the investment firm committed to supporting cryptocurrency and blockchain-themed projects, and 7 Blocks, a Singapore-based investment fund.
Tell us about the product or service that Altonomy offers.
Altonomy provides institution-grade trading and liquidity provision services for investors, exchanges, and token projects across a variety of trading venues worldwide. We deliver the most favorable spreads in OTC markets given the time and liquidity constraints for different token dynamics.
We also provide an institutional cloud mining product, AltMiner, to international institutions and accredited investors that provides long-term exposure to bitcoin. This entitles them to a share of any digital assets the machine successfully recoups over that period, without incurring the same cost overheads as direct ownership of mining technology would.
What inspired you to start Altonomy?
We saw a huge need for a dedicated OTC sell-side trading desk to provide more liquid trading options for digital assets, as investors look to enter the asset class.
How is Altonomy different?
Altonomy is the first-ever dedicated sell-side trading desk to provide institutional-grade liquidity solutions, OTC trading, advisory and cloud-based mining exposure under one roof. Since launching in 2018, we have worked with more than 60 crypto exchanges, over-the-counter (OTC) partners, and stablecoins such as USD Coin, Tether, TrueUSD, and the Paxos Standard. There are three core tenets that help set us apart:
- Our global team has substantial experience and a fundamental understanding of both traditional finance and crypto world. Altonomy’s diverse experience, proven track record, and best-in-class infrastructure also makes us the ideal partner to help navigate primary and secondary token investing.
- Our proprietary Hybrid IQ™ methodology combines the team’s extensive crypto market experience with market-making algorithms to provide deep order books and optimal spreads from multiple venues.
- We have built a robust network of partners to help capture market sentiment and allow our clients to achieve their goals. Altonomy has direct partnerships with more than 80 ICO project teams and investment funds, as well as 40-plus token issuers from the top-200 by market capitalization.
What market does Altonomy target and how big is it?
Altonomy targets institutional investors seeking exposure to a broad range of crypto types within the asset class, including major cryptocurrency and altcoins. As a certified liquidity provider for CME Group and Huobi’s bitcoin futures products, we also work with some of the largest crypto exchanges and regulated futures markets globally.
Who do you consider to be your main competitors?
Goldman Sachs and Fidelity are operating OTC trading services similar to Altonomy, however, they are mainly focused on BTC and ETH trading. We are proud to provide liquidity for our clients in a much wider range of crypto assets. Our network of partners includes crypto investment funds, projects and exchanges, enabling us to source liquidity from areas where others can’t reach. This advantage is built upon our deep experience and broad presence across the digital assets industry.
What’s your business model?
Altonomy provides 24/7 OTC transaction services for crypto-to-fiat and crypto-to-crypto transactions, while simultaneously offering best-in-class coverage for illiquid tokens. We focus on institutional investors of all sizes that have a need for liquidity, either through OTC or exchange-based transactions, on a wide range of crypto assets with varying market cap sizes. As mentioned previously, our institutional cloud mining product, AltMiner, also provides institutions and accredited investors with long-term exposure to bitcoin.
What was the funding process like?
Very smooth. We had previously traded with Polychain Capital and 7 Blocks since early last year, so both organizations were familiar with our business model.
What are the biggest challenges that you faced while raising capital?
It’s about finding the investor that can help us to strategically drive company growth. Altonomy has been consistently profitable, so we were not looking for capital to sustain operations. Instead, we sought investors that have a deep network and insight into the crypto industry. We were fortunate that Polychain shared the same views for our firm and decided to help grow our business.
What factors about your business led your investors to write the check?
It’s the comprehensive list of cryptocurrency types that we offer liquidity for. We are proud of our ability to source liquidity for customers, regardless of token type, order size, market cap, or whether the asset trades on centralized or decentralized exchanges.
It’s the comprehensive list of cryptocurrency types that we offer liquidity for. We are proud of our ability to source liquidity for customers, regardless of token type, order size, market cap, or whether the asset trades on centralized or decentralized exchanges.
For these reasons we are an ideal partner to help investors navigate primary and secondary markets, so they can harvest returns that are uncorrelated with the broader financial markets.
What are the milestones you plan to achieve in the next six months?
We will focus on serving institutional investors of all sizes by providing liquidity that is necessary to handle large orders. Ultimately, we want to increase the number of institutional investors, exchanges and digital asset product makers/providers that Altonomy works with.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Stay profitable. Then, you will have the flexibility to engage strategic investors that bring value to you, not just capital.
Where do you see the company going now over the near term?
Altonomy has been growing rapidly. We are continuing our hiring for trading talents and will simultaneously continue to expand our operations and customer outreach.
What’s your favorite restaurant in the city?
Tang’s Hotpot.
