by Mike Persico, CEO and Founder
In our year-end review, we looked at 2021 through the lens of the telecoms industry and forecasted what lay ahead in 2022, for both the landscape at large and Anova specifically.
The onset of the pandemic made 2020 a year of rapid change and reactivity. 2021 rebounded with a year of initiatives. The rise of crypto and its latency maturation, FX asset class diversification, and the appetite for Asian (notably, Chinese) expansion were some of the macro storylines. Closer to home, here at Anova, our proprietary wireless backbone capacities continued to grow, headcounts were added, multiple awards were won and the ongoing debate of culture vs. remote workforce and its effect on commercial real estate decisions dominated the internal zeitgeist.
Looking at these individually, the biggest storyline certainly has to be the demand and buzz surrounding cryptocurrencies. Centralized crypto exchanges, which hold customers’ private keys, unlike decentralized exchanges, reported more than $14 trillion in trading volume in the year 2021, according to The Block Research.
That figure is a massive 689% increase compared to 2020 trading volumes, based on data as of December 24. Last year, centralized crypto exchanges facilitated over $1.8 trillion in trading volumes.
Putting this into relation from a telecom perspective, created the need for new routes, new connections and new opportunities. 2021 also saw crypto traders being concerned with latencies between endpoints – something that slots very well into Anova’s sweet spot. Look for this trend to continue into 2022 and our offerings to increase in concert to meet client demand!
While the traditional equities and futures exchanges chugged along with their respective record volumes, 2021 also saw increased expansion into FX areas at a rapid pace. Exchanges such as B3 and TSX saw increased volumes, which in turn generated additional connection requests to their matching engine sites. Specifically, in 2021, B3 recorded a record financial volume traded on the exchange’s spot market, reaching R$7.04 trillion, which represents an increase of 3.65% compared to 2020, according to data released by Economatica.
Likewise, Canadian stocks on the TSX closed out their best year in over a decade amid a rebound in oil prices, despite the S&P/TSX Composite Index dipping on the last trading day of 2021. According to Bloomberg, the benchmark rose 22% this year, its best annual performance since a roughly 31% rise in 2009. With best-in-class routes to both of these destinations, reach out to your Anova account team if you’re interested in adding or improving your connection to these markets.
Expansion of trading and business opportunities within Asia and in particular China remain enigmatic and opinions differ wildly about its short-term prospects. It is at once the golden goose/unicorn and hostile environment fraught with geopolitical tensions.
Yahoo and LinkedIn are the latest U.S. companies to throw in the towel amid China’s sweeping crackdown on private enterprise— both announcing in 2021 they are ending their services in the world’s most populous country.
But even as many experts say Beijing is presenting an increasingly antagonistic business environment for U.S. firms, the vast majority say they have no intention of leaving. Still, the latest exits raise questions about the future of U.S. business in China.
Industries outside of tech and gaming may be growing their China operations. Many financial institutions appear to be doubling down on their China interests. Last August, BlackRock, the world’s largest asset manager, got approval from regulators to start a mutual-fund business in China. Banks like J.P. Morgan and Goldman Sachs have in recent years won approval to set up the majority- or 100%-owned securities ventures—which normally house businesses including investment banking, equities and research—in the country.
Specifically, on the trading side, China’s regulator expanded the investment scope for foreign investors, adding key commodity and stock market derivatives in the latest move to open its financial markets, even as Beijing’s crackdown on a broad section of its private sector has roiled markets.
Qualified foreign investors will be able to trade commodity futures, commodity options and stock index options, China Securities Regulatory Commission said on its website on Friday. The changes took effect this past November.
How these conflicting policies and rising tensions ultimately affect expansion remain to be seen. From a connectivity standpoint, client demand has been stable to slightly waning, leading Anova to view the region as cautionary when thinking about CapEx deployment and asset investment in 2022.
On the home front, 2021 was the year of FSO. Anova upgraded its proprietary laser-based platform to 10gbps, making it the highest capacity wireless backbone in existence. This technology has since been deployed in production across a myriad of routes. Look for more on this exciting technology in a future blog as 2022 has additional developments in store.
We’ve also been busy on the hiring front – Anova grew its sales team by almost 20%, its engineering and development capacity by 100%, and added 33% more headcount on the finance side. These additions will only serve to improve our offerings, support and service to our valued clients. 2022 should see a similar level of growth, as we’re looking to fill positions in provisioning, help desk and make the transition to a more robust internally-based NOC.
In 2021, Anova captured some of the most prestigious industry awards. In June, we were awarded the “Best Low Latency Data Feed – Direct” at the 2021 TradingTech Insight USA Awards. TradingTech recognized the benefit of Anova’s Zero Gap feed – one that combined industry-leading 10G of capacity with our self-healing platform to ensure a gap-free feed.
And to wrap up the year, in December Anova won “Best Trading Infrastructure Provider” at the American Financial Technology Awards by Waters Technologies.
In summary, 2021 was a whirlwind it was fluid, and it was exciting and challenging all at once. It was another year in the life of a financial exchange connectivity carrier! There are ups and downs, highs and lows, but in the end, none of us would want to be anywhere else. We create and deliver some of the world’s most groundbreaking technology, which is intrinsically fulfilling, not only as a company but also from the standpoint of pushing trading infrastructure further and faster. We live on the cutting edge and that makes our jobs beyond interesting.
For 2022 we see more of the same. New products to be launched, new technologies to be developed, and new routes to be added…all the while seeking to improve our current offerings to keep pace with the ever-changing and competitive landscape.
Invest, Solve, Deploy, Re-invest, Make it Better, Re-Deploy. The cycle continues.
To our clients, we’re honored to be your carrier of choice and greatly appreciate the trust you put in our networks for your most valuable trading data. If you haven’t yet experienced the difference of connectivity from Anova, we’d love to show you the good side of telecom!