On September 1, 2021, we hosted a Crypto Beta Launch AMA session featuring CEO Yoshi Yokokawa, CTO Hitoshi Harada, and Vice President Tarun Ajwani.
This event gave our community the opportunity to ask our panel specific questions about the crypto beta launch and exciting future developments. Below, you'll find a recap of the live AMA session and questions asked by community members, as well as our panel's answers.
Q: What cryptocurrencies will initially be supported?
Tarun: The initial launch will include the four most liquid, Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. There will be more and more to come with your feedback and the community's feedback. We want to hear from you. We want to know what products and cryptocurrencies you want to see.
Q: Will crypto trading be added to Broker API?
Hitoshi: Yes, today we announced crypto availability for Trading API, but that being said, we are aiming to provide these same capabilities through Broker API for the developers and companies to build their own capability. The API change is very minimal and it's going to be pretty straightforward to make it available. We’re finalizing a few items to start delivering it through the API, Broker API as well.
Q: Is there any documentation available for crypto-related APIs?
Hitoshi: We have already updated the API docs. You can go to alpaca.markets/docs, there are API documents available and it is also hosted in GitHub so you can see the change history as well. As of Monday, we have updated that documentation work on the production side as well. The actual API change is very minimal because the idea is we wanted to make this as simple as possible. And the way it works is you can just specify the symbol to be like BTC USD to buy those coins. So nothing really changes in terms of the API capability. But of course, there's some logistics behind it and some of the rules may differ from the stock side, so you can take a look at that and post any questions in Slack or Forum.
Q: When will crypto trading be fully launched?
Tarun: Our plan is to launch fully in Q4 of this year. Legally, we’re required to make sure that we're licensed in each and every state and jurisdiction. So we're closely working on applications in each state and we're also working on International jurisdictions as well. That's a little more challenging to navigate, as you can imagine, the number of countries that are on the list that would like to have access to crypto. What is in scope for the first phase are the states of California, Massachusetts, Montana, and Missouri. We're working live on the rest of the states as well. We will hopefully be able to announce the additional states sometime later this year.
Q: Why did you decide to move into crypto and why do you believe in crypto?
Yoshi: Crypto has always been the top one in our minds since we started the Alpaca platform a few years ago. In fact, we have had the legal entity to be able to offer crypto for a few years, although we have not really started providing it. So this has been the key product we always wanted to provide. That's the context in terms of why crypto. I think everyone agrees that crypto is going to be a big part of our society and part of the financial services system, especially because we're dealing with a lot of legacy framework and legacy infrastructure and we have been experiencing that because we ourselves are dealing with back-end infrastructure that's super legacy for outside third-party Integrations. We of course want to change that. And that is the part of the reason why we are doing this as a company, and crypto and the decentralization and all those concepts are something that we definitely want to keep pushing and be a part of. This is really the first small step for us to be in the crypto world and we hope to continue to add more and push for more involvement into this sector.
Q: How will crypto work with Trading API?
Hitoshi: In terms of the API, there's not much change. You can query for assets through the Assets API and you can submit the same side of the order to the old API and you get that based on the positions across the different assets the same way. So again, you can take a look at the API docs and changes and post any questions you have.
Q: What is a cool project you're hoping someone will end up building with crypto and Trading API or Broker API?
Tarun: We want to hear what the community wants us to build. That's what excites us, when you ask us for projects in solving problems that you're interested in solving. Some of the ones that have been thrown out to us have been staking, having an Alpaca NFT, if anyone's interested in that we could probably create an entity of these backgrounds, having high yield products, and then getting into tokenized stocks in the future.
Q: What are your opinions on crypto being adopted, or supported as legal tender in different countries, and do expect to see this as a trend?
Tarun: We're excited to follow the news that countries are putting out there. I think everyone is probably picking up the newspaper daily and noticing that there’s an existing country that wants to pave the path forward and pioneer that change and we admire them; we admire their tenacity to want to do that. We're going to continue to follow them. We're going to hopefully learn from their leadership and support the building of innovative products around that over time.
Q: What is your roadmap for crypto?
Tarun: First and foremost, we want to hear from all of you. We want to know what you want us to build. The road map is going to be led by the community, by our broker partners or trader partners who are using our services. And to touch on the points earlier, if there are unique product sets that you have ideas for, we want to hear about them.
Q: Will there be crypto trading fees, and if so, what would they look like?
Tarun: We are true to our philosophy - we’re commission-free. On crypto, our partners may offer rebates. That would be the only form of compensation we would possibly receive, similar to how payment for flow works.
Q: For Trading and Broker API, will there be support for tax-advantaged accounts in the roadmap?
Hitoshi: There are a few different account types to support through Broker API on the roadmap and if you contact our sales team through the broker dashboard, you can get more information about it.
Q: Can you open paper trading for the time being until the regulation is clear?
Hitoshi: Yes, paper trading will be available for everyone once it's open. It's a purely simulated environment so no matter where you are, you can try paper trading.
Q: Can you talk about what kind of historical data will be available for backtesting?
Hitoshi: The market data will be available the same way as stock, and unlike the stock market data, we will provide the years of the data points even if you are not subscribed to the Premium plan, and the same data is provided to everyone. We are working with one data provider to provide historical data, and so you may see some differences from what you have seen elsewhere, but we think it's pretty representative so that you can run backtesting pretty well.
Q: As a Broker API partner, will we need our own crypto-asset license, or will it be an extension of our relationship with Alpaca?
Tarun: It will be highly dependent on the jurisdiction you're serving and the rules and that local jurisdiction. If you’re in a country or a state that we operate in that is approved on our final list that comes out later this fall, yes. If you have a better understanding of your own local country and jurisdiction and you know there's licensing required, then we would require you to be licensed there as well.
Q: How is Alpaca’s crypto product different from other competitors?
Yoshi: We are really building and built our platform for firstly programmatic interaction with the market. That could be stocks or that could be crypto. So that is what we have built experience for. We are really targeting [to offer] a different experience compared to other apps and venues that you can have access to, in a different way.
Tarun: The great thing is you'll still be using the same front door to enter into our platform, whether that’s on the crypto or securities side. You'll of course have to go through two sets of legal documents that you would agree to, but the experience will be fairly seamless. So interchangeably, you'll be able to move from your securities account to your crypto account, pull quotes for BTC USD transact, BTC USD and programmatically in the background, we will take care of the money movement from the relevant legal entity into the hands of the crypto entity to make sure that you’re protected and we’ll be securely holding that with our prime broker partners that are involved in the execution and custody and settlement.
Q: How many coins do you expect to have live on the Alpaca platform by public launch? And how long until the coin offerings rival other apps like Coinbase?
Tarun: We want to essentially launch with the four main coins: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and then we want to hear from you. If there are the fifth, sixth, seventh, eighth, ninth, and tenth you want us to launch after our fall debut, we want to hear from you. So please give us that feedback loop.
Q: Is the business model for Alpaca different with crypto than stocks?
Tarun: The business model is very similar from an infrastructure standpoint. We have a shared technology company that supports both the security side of our business and the crypto side of our business. The model is to make this a seamless as possible for everyone to interact between both asset classes and to cut down any friction and need to have multiple logins across different providers of crypto and equities in the marketplace.
Q: Do you think of partnerships with 3Commas, Coinrule, or others?
Tarun: Going back to our point about dealing with strategic partners, we plan to continue to build out the ecosystem. We want to make sure that you're always getting the best execution of the cryptocurrencies that we will offer now and in the future. And to that end, we think it’s very important for us to tie into as many different venues, whether that is market makers, exchanges, OTC desks to provide you with the best execution.
Hitoshi: We also work with the other side of the equation, which is more like there are a number of all those applications that are being built on top of our API, and we have already had some interests to support specifically for that kind of crypto integration as well. And as we mentioned earlier in this call, we are going to provide this through Broker API as well. So we are looking forward to seeing more additional interesting use cases and applications through crypto.
Q: Can you expand on tool integrations for crypto and also Broker API and Trading API?
Yoshi: We continue to build the developer interface for this API product. The more that apps and communities build on top of us, the more it makes our product worthwhile. We definitely want more ideas and involvement and we're going to try our best to make sure that there is a great starting point; SDKs, and an open-source code base that a lot of people can utilize. That continues to be our focus and the place that we want to put a lot of resources into as a company.
Q: Are tokenized stocks on the horizon?
Tarun: We're interested in hearing on that one from you as well, how you would like that to work. It is a fascinating space. We're reading about and following many DeFi providers out there that have that capability and will continue observing to make sure that when the time is right and the feedback has been gathered that we can have a response or a product in the future.
Learn more about Alpaca's crypto offering in our announcement blog.
Cryptocurrency is highly speculative in nature, involves a high degree of risks, such as volatile market price swings, market manipulation, flash crashes, and cybersecurity risks. Cryptocurrency is not regulated or is lightly regulated in most countries. Cryptocurrency trading can lead to large, immediate and permanent loss of financial value. You should have appropriate knowledge and experience before engaging in cryptocurrency trading.
Cryptocurrency services are provided by Alpaca Crypto LLC ("Alpaca Crypto"), a wholly-owned subsidiary of AlpacaDB, Inc. Alpaca Crypto LLC is not a member of SIPC or FINRA. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC.
This is not an offer, solicitation of an offer, or advice to buy or sell securities or cryptocurrencies, or open a brokerage account or cryptocurrency account in any jurisdiction where Alpaca Securities or Alpaca Crypto respectively, are not registered.
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