Cryptocurrency: Is the juice worth the squeeze?

Monday, May 21, 2018 | By Nick Nolan

Cryptocurrency: Is the juice worth the squeeze?

There is no shortage of opinions. Is crypto the road to untold riches? The mainstream transactional medium of the future? A short-lived boom that is bound to go bust? What we do know is that it is a zero sum game and the future is anyone’s bet, literally.

For now, one thing is evident: cryptocurrencies are extremely volatile, with the potential for enormous swings in either direction almost instantaneously. With this volatility comes a lot of opportunity, explaining much of their appeal to investors who have an appetite for that type of risk.

For the past few months, we’ve received inquiries from the investment community – from both start-ups and well-established firms. Coming to us directly or through various fund administrators, we have been asked if the Geneva platform can account for cryptocurrency trades and positions. This indicates that the business need to track and report on cryptocurrencies has become mainstream.

Geneva made its reputation with comprehensive asset class coverage, which includes wide-ranging FX capabilities. Trading in cryptocurrencies is much like, say, buying or selling dollars for euro or yen – with a couple of important differences, which we have addressed in our latest Geneva release.

With version 18.1, Geneva’s spot FX functionality has been enhanced to increase the precision out to eight decimal points. Traditional currencies typically need only two decimal points, whereas currencies such as Bitcoin or Ethereum or any of the others can have as many as eight decimal places. In addition, cash holdings are typically “lumped” together, whereas cryptocurrency trades  need to be accounted for as individual tax lots. Geneva has the capability to support cryptocurrency lots along with lumped traditional currencies.

Whatever the future holds, we’re already planning further enhancements to Geneva to support crypto-trading in our next release and beyond. For more information on how SS&C Advent can support your future growth, visit Geneva.

Alternative Investments, Asset Management

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