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Crypto Exchanges Betting on Institutional Players — But Are They Coming?

3 mins
Updated by Adam James
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In Brief

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Binance, one of the world’s leading crypto exchanges, announced the launch of a new Sub-Account feature specially designed for institutional crypto traders.
The company claims the new functionality is developed to meet the high requirements of its institutional account holders and offer them better services. From now on, every corporate user with an account tagged as VIP Tier3 and higher will be able to have multiple sub-accounts. The upgrade will enable institutions to open up to 200 accounts with different access levels, umbrellaed by a master account. Corporate customers will have better and still more flexible control of their funds on different levels. The exchange hopes the new functionality will provide institutional investors with more efficient management solutions and attract constant traffic from corporate accounts.

A big pivot to institutional customers…

Notably, Binance is not the only crypto company betting on institutional segment amidst the crypto bear market. The frustration and loss of enthusiasm among retail traders force an increasing number of exchanges to lure corporate customers with new functionality and dedicated products and services. Operators of cryptocurrency trading platforms hope that prominent and wealthy investors will stabilize the struggling market and perhaps instigate a new bull trend. US-based exchange Coinbase targets traditional financial institutions. In May, the company offered custody services for its institutional customers and recently embarked upon testing its over-the-counter (OTC) trading desk. Recently, another large crypto exchange, Poloniex, also jumped on the bandwagon and opened trading services for institutional clients offering them dedicated support. Meantime, Intercontinental Exchange (ICE) is getting ready to launch Bakkt, a crypto trading platform for institutional traders. It was designed from ICE’s time-proven and regulated infrastructure. Thus, Bakkt is potentially able to support the whole crypto market by making digital assets accessible for traditional investors. Proper infrastructure development is very important for crypto companies competing for the attention of institutions. Another example of this is XTRD project that works to introduce the next generation of infrastructure. The solution developed in partnership with a network service provider, Avelacom, and will provide institutional traders with easy access to crypto markets. Bakkt

…But are they coming?

While the cryptocurrency market is still under an intense bearish pressure, there are some clear signals of rising interest from traditional financial institutes. In December, crypto exchange ErisX attracted investments from Nasdaq, a leading stock market operator, and Fidelity, one of the top asset managers. ErisX, in its turn, pledged to keep on developing a regulated market for digital assets. At the same time, a blockchain network Conflux Foundation managed to raise funding from such heavyweights as Sequoia, Baidu and Huobi. Apart from that, many cryptocurrency companies — like Binance, Huobi, Coinbase — operate within a regulatory framework. By offering custody services and investment options compatible with KYC and AML requirements, the exchanges allow institutions to get exposure to digital assets. While the US Securities and Exchange Commission (SEC) is yet to deliver its verdict on Bitcoin ETF, but it is not a decisive factor for institutional adoption anymore. Furthermore, cryptocurrency prices moved from an overhyped state and reached more attractive levels. Bitcoin is hovering around 3,500, losing over 80 percent of its value since the beginning of the year. Whether Bitcoin and other digital assets have hit bottom remains to be seen. From the longer-term point of view, the market is poised for a bounce that will bring generous returns to those who enters the game at the right time. Do you believe institutional investors will save the struggling crypto market and help to start a new bull trend? Or maybe cryptocurrency exchanges back the wrong horse? Let us know what you think in the comments below!  [Disclaimer: This is article is not financial advice, and should not be construed as such. It is for informational purposes only.]


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Tanya Chepkova
Tanya started as a financial news feed translator and worked as a financial analyst, news editor and content creator in various Russian and Foreign media outlets. She came to the...