Senior trading executives believe that larger trading companies are about to take the crypto plunge, and could be set to provide the market with a timely boost, per a new study. Bitcoin/USD is the most preferred trading pair, it added.
In a report named Institutional Adoption of Digital Asset Trading, compiled by the Acuiti management intelligence platform, in conjunction with the CME Group and the crypto exchange, authors claimed that survey data “suggests the digital assets market is on the cusp of significant growth from traditional trading firms.”
The findings were based on a survey of 86 senior executives “across the sellside, proprietary trading firms and the buyside.” The authors stated that its respondents from non-bank Futures Commission Merchants, proprietary trading firms and the buyside “tended to be C-suite [the executive-level managers],” while banking and brokerage respondents were primarily “heads of function at managing director level.” The findings were announced this week. However, the authors did not specify whether the survey was conducted before or after the market crash in March.
In either case, according to the survey, although most “traditional trading firms” still refuse to handle crypto, the tide could be about to turn.
The authors wrote,
“97% [of trading firms] will consider the opportunity again in the next two years or less and 45% are planning to revisit the idea in six months or less.”
What’s stopping them? Yes, you guessed it – it's regulation again.
The authors concluded that “The precursor to expansion is likely to be the catch-up of regulatory frameworks in the United States and the EU to encompass digital asset exchanges and create more regulated markets.”
The executives also said that when it came to selecting which cryptocurrency or stablecoin to trade in, the respondents’ primary consideration was liquidity, followed by volatility and arbitrage opportunities.
The authors wrote,
“Surprisingly, [the] arbitrage opportunities [criterion] was driven into the top three purely by traditional trading firms but not from crypto trading firms. This is linked with the priority of speed and performance for traditional trading firms, suggesting a different trading dynamic from crypto trading firms.”
