[ad_1]
Brandon Mulvihill, Co-Founder and CEO of Crossover Markets, dug
into the growing crypto market structure and institutional adoption in an
interview with Finance Magnates’ Jonathan Fine at the Finance Magnates London
Summit 2024 (FMLS:24).
His insights shed light on inefficiencies in crypto
exchanges, likening them to retail brokers in FX markets, and emphasized the
urgent need for disruption through ECNs offering lower trading costs. Mulvihill
also highlighted how pro-crypto political sentiment and ETF approvals have
driven institutional participation, with rising volumes signalling increased
M&A and IPO activity on the horizon.
Crossover Markets Launches First ECN
Mulvihill explained the foundation of Crossover Markets and
its flagship product, CROSSx, which he described as the first ECN (electronic communication
network) in the crypto space. Comparing traditional crypto exchanges to
retail brokers in FX markets.
“What we are with our product CROSSx is an execution-only
platform in the digital asset space, specifically an ECN. We were the first ECN
in crypto. What we saw was that crypto exchanges, at their core, are
client-facing brokers, similar to how IG Group compares to OKX or Coinbase in retail
FX,” Mulvihill stated.
Institutional Exchanges Present Disruption Opportunity
“Institutional exchanges are analogous to Finalto or IS Prime.
They use central limit order book technology, meaning one market data and one
pool of liquidity, creating uniformity across over 300 institutions globally.
We saw this as an opportunity to disrupt the market,” he added.
Expanding on the parallels, he said: “What they really are
at heart is a client-facing broker.” Mulvihill underscored that this uniformity
presented an opportunity for disruption, saying: “We said, wait a minute. If
you look at the FX
market, ECNs came in and were disruptive for lots of reasons. Let’s put our
hat into the ring and become the first-ever ECN in crypto.”
Pro-Crypto Sentiment Drives Institutional Participation
One critical inefficiency Mulvihill addressed was the high
cost of trading in crypto
markets. “The cost of trade is too high,” he stated, explaining that retail
traders often face costs of $4,000–$8,000 per million traded, while wholesale
costs range from $500–$1,000. In contrast, CROSSx offers significantly lower
rates. “Our default rate is one basis point per million, and we’re seen as the
real cheap guys,” he noted.
Mulvihill also reflected on broader developments in the
market, highlighting the positive influence of pro-crypto political sentiment
and ETF approvals from institutions like BlackRock. “You can’t
trivialize it; it’s been the most positive macro influence on the crypto space
since I’ve been involved,” he remarked. He observed a notable increase in
institutional participation, with volumes steadily climbing.
M&A and IPOs to Surge
Looking ahead, Mulvihill forecasted robust growth in M&A
activity and IPOs within the crypto space. “I think people are going to see a
significant increase in M&A activity and IPOs in the crypto space,” he
predicted.
This optimism, he explained, stems from growing regulatory
clarity. “There’s a fundamental and collective belief that the momentum behind
a regulatory structure in the US is now palpable. It’s real.”
Crypto Market Needs Structural Improvement
Mulvihill stated that advancements in technology and
settlement solutions could address current barriers, contributing to a more
efficient and accessible market for institutional participants.
He concluded by highlighting the need to reduce costs and
improve market infrastructure to support institutional adoption. “Crypto has
been, from a market structure standpoint, very immature,” Mulvihill acknowledged.
This article was written by Tareq Sikder at www.financemagnates.com.
[ad_2]
Source link
