Quick take:
- EDX Markets has launched its digital assets trading platform in the US.
- The institutional exchange platform is backed by some of the biggest financial services companies including Charles Schwab, Citadel Securities and Fidelity Digital.
- The platform will initially support spot trading of four assets, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
EDX Markets has started offering spot trading services for Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). The digital assets marketplace was founded by some of the leading financial services companies including Charles Schwab, Citadel Securities, Fidelity Digital AssetsSM, Paradigm, Sequoia Capital, and Virtu Financial.
The launch comes following an undisclosed funding round from new equity partners. EDX is designed to serve traditional investors looking for opportunities in the digital assets space. The platform builds on best practices from traditional finance and offers various benefits to customers including liquidity, competitive quotes and a unique, non-custodial model designed to mitigate conflicts of interest, EDX Markets said in a press statement on Tuesday.
The company plans to launch a clearinghouse later this year to enable the settlement of trades matched on EDX Markets.
Commenting on the announcement, Jamil Nazarali, CEO of EDX highlighted the successful launch and fundraising as a demonstration that its platform offers a safe and compliant cryptocurrency market, amid the current bear market.
“We are committed to bringing the best of traditional finance to cryptocurrency markets, with an infrastructure built by market experts to embed key institutional best practices. With the endorsement of our new and growing list of investors and customers, we’re proud to launch trading and look forward to further enhancements to our offering.”
We asked other industry experts to weigh in on the matter and the potential implications for Binance US and Coinbase and the crypto market.
According to Ty Smith, the founder and CEO of Coinbound, EDX Markets and Binance US target two different markets, meaning as long as Binance US continues to operate within the regulatory framework, its success won’t be defined by EDX.
“[Binance] have primarily targeted crypto-savvy investors. On the other hand, EDX seems to be directed towards traditional finance investors who are now seeking exposure to the crypto market, he said.
Smith also thinks this move by Charles Schwab, Citadel Securities and others could have a positive impact on the crypto market. “Given the recent concerns and uncertainties surrounding the crypto market, especially in light of the FTX and Binance fiasco, there have been doubts about the future of cryptocurrency and whether it’ll be around in five years,” he said adding, that it sends a message to the market that traditional financial institutions are actively planning their future with crypto in mind.
Smith also thinks EDX’s launch is incidentally perfectly timed to profit from the crisis amid recent events that have engulfed other crypto exchanges including FTX, Binance.US, and Coinbase.
On the other hand, Anthony Georgiades, co-founder of Pastel Network thinks that EDX Markets’ traditional model of investing could lower the barriers to entry, allowing more individuals to trade cryptocurrencies, regardless of their background.
“Utilizing a more traditional brokerage model, akin to NYSE’s relationship with brokerages (e.g. Fidelity and Schwab), allows for all individuals to invest in crypto in a more structured and potentially less-risky way. Additionally, by relying on traditional finance brokerages, the U.S. and its regulatory bodies can more easily create fair and better standard practices for the trading of and investing in crypto,” he said.
Georgiades also agrees that the move is good for the crypto industry overall because it will onboard non-crypto native traders, adding that EDX is pouncing on an opportunity created by the collapse of the crypto native exchange platform FTX, and the recent SEC lawsuits against Binance.US and Coinbase.
“These institutions can enter a high growth vertical without mass competitive pressures, while also using their institutional frameworks to ensure the highest level of regulatory compliance,” said Georgiades.
Chris Martin, Head of Research at Amberdata said he does not expect any significant impact on Binance.US as it is already planning to move to crypto-only trading services, but expects EDX Markets to onboard a new wave of investors, which is good news for the industry in general.
“Exchanges like EDX, [which are] built through traditional finance companies, have been rumoured for some time now and these platforms often take years to build. It’s great to see them launching during a time of regulatory uncertainty as it serves as an example of how traditional finance capitalizes on opportunities in new markets,” Martin added.
Alex Strześniewski, founder and CEO of AngelBlock also thinks the timing may be too perfect to be a coincidence.
“The timing is nothing but peculiar. Large players like Coinbase and Binance have been served by the SEC recently, leaving just enough doubt in the markets for tradfi to start making some serious moves.”
“Strangely enough only four assets will be made available: Bitcoin, Ethereum, Litecoin, and Bitcoin cash – the two former definitely losing a lot of their allure to investors in the last 5 years with not a clear direction of where they may be heading. Just by the product offering it seems like a very safe and “don’t rock the boat” approach with some of the more innovative and alluring tokens and coins on the market being omitted,” he added.
****
Stay up to date:
Subscribe to our newsletter using this link – we won’t spam!
