Traditional trading firms and institutions alike have had a significant demand for digital assets, a recent extensive survey from acuti found.
The report was made in partnership with Bitstamp and CME Group and included survey from traditional trading firms and institutions, specialist crypto trading firms and sellside service providers.
According to the report, current adoption rates are relatively low with less than a fifth of traditional firms included in the survey currently trading digital assets such as Bitcoin and Ether.
However, Acuti found a growing demand from traditional trading firms to enter the market or expand their coverage to trade more cryptocurrencies.
Traditional trading firms that had decided not to trade in digital assets, 97% will consider it again in the next two years or less and 45% are planning to do it in six months or less.
We identified two major splits in the current market for crypto trading. One was between traditional trading firms and specialist crypto trading firms. Traditional firms that traded digital assets tended to limit their coverage to bitcoin derivatives on traditional markets, such as CME, while specialist crypto firms traded on a broad range of markets.
We also found a growing split between demand from traditional trading firms to broaden their coverage of digital assets and the willingness or ability of sellside firms to provide access.
A key point in the report was that firms trading on multiple digital assets exchanges were more profitable than firms trading on one or two exchanges, explaining the demand to broaden offerings.
Wide spread adoption will benefit from clearing firms and other service providers expanding their offerings to include a range of markets. Most sellside firms, however, are do not want to offer access to markets unregulated in their home jurisdictions.
Some exchanges, such as Bitstamp, have been regulated and licensed within the EU as a payment institution and obtained the BitLicense in the US. To facilitate significant growth, ongoing efforts in the US, EU and the UK are working on a more formal regulatory structure for specialist venues.
Will Mitting said:
The future of digital asset trading is likely to be fragmented with opportunities created by market structure as much as market movement. CME and the traditional derivatives markets will sit alongside regulated digital assets exchanges creating a vibrant and dynamic market for trading.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
