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New players are reshaping crypto market structure, and that's bad news for exchanges

Quick Take

  • Traders usually engage directly with exchanges or OTC desks, but a new class of firms – agency brokers – are acting as middlemen between investors and the market
  • This could spell trouble for exchanges, as brokers routing orders to market makers take order flow that would otherwise go to exchanges
  • Other barriers for exchange: the cost and difficulty of trading in comparison to utilizing agency brokers.
The structure of the cryptocurrency market is changing in a big way – and exchanges might come out as the losers.  The market structure of the crypto world is drastically different from U.S. equities. In equities, traders place a trade via a broker, such as TDAmeritrade or E*Trade, who in turn either route the order […]

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