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How to Make Crypto More Attractive to Institutions

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by Julia Sakovich · 5 min read
How to Make Crypto More Attractive to Institutions
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Apifiny has a somewhat unique position in the crypto markets, as it offers solutions aimed at institutions, individual professional traders, and exchanges.

That the current bull run has been institution-led is undeniable. In October last year, PayPal kicked things off with the announcement it was staging a return to cryptocurrency after a five-year hiatus. Since then, the crypto news headlines have been a veritable who’s-who of institutional participants, with MicroStrategy, Tesla, Citigroup, Deutsche Bank, BNY Mellon, Mastercard, and more announcing their intent to step into the world of digital assets.

For those holding crypto since the last major price collapse during the ‘crypto winter’ (2018 – 2019), the current market feels like vindication. However, the crypto community mustn’t get caught up in complacency or bullish euphoria. Institutions are only getting involved now because the potential rewards outweigh the risks.

A report published in January by eToroX identified that institutional participants still have concerns about a lack of unified regulatory alignment. Nevertheless, the current market caps are simply too high to risk missing out as others move in. The report revealed that institutional respondents to the survey view market cap as the biggest driver of liquidity, which is a key draw for the wealthiest investors. They also cited other factors critical to liquidity, including ease of market access, fragmentation, and price transparency.

Of course, it’s demand that drives the market cap, as Bitcoin’s supply is fixed. Therefore, to ensure that institutional demand continues to push the market cap up, it seems imperative that the crypto markets can solve the other issues. This would mean making it easier for institutions to access the markets, aggregate liquidity from multiple sources to reduce fragmentation, and ensuring optimized price discovery across the markets.

Effectively, it means pushing the crypto markets to the next stage of maturity, to deliver the customer experience institutional traders and investors experience in other, more developed markets.

This is the challenge that Apifiny aims to meet.

Transforming Market Friction into Opportunity

Apifiny has a somewhat unique position in the crypto markets, as it offers solutions aimed at institutions, individual professional traders, and exchanges. The company has two core products, Apifiny Connect and ExOne Plus.

Apifiny Connect is a single gateway to over 20 exchanges worldwide, which offers traders and institutions access to far deeper global liquidity and global price discovery with just one account; one onboarding; and one API. It offers the best bid and offer prices around the globe, with fast order execution to minimize slippage.

Effectively, it solves all three problems identified above – ease of market access and price transparency, as traders, brokers, quant funds, and family offices can access the best possible price from any connected exchange.

ExOne Plus looks at the other side of the equation – exchanges. It allows exchanges across five continents to participate in a vast digital asset trading network. In this way, it ensures that even smaller exchanges can meet a greater volume of higher value orders, delivers tighter spreads for those exchanges, and reduces the incidence of split orders, making it more likely that participants will attract institutional investors. Established exchanges participating in the ExOne Plus network include OKEx, Crypto.com, Huobi Global, KuCoin, AscendEX, HBTC and Blockchain.com’s Exchange among others.

The company is based in the New York metro area, but operates across five continents, with a presence in many major financial hubs, and is in the process of applying for a FINRA broker-dealer license.

In February 2021 alone, Apifiny saw trading volumes over $1 billion and is aiming to deliver improvements that will ensure faster connections and more transactions per second.

Bridging the Institutional Divide

Recently, Apifiny announced it was planning to follow in the footsteps of crypto trailblazer Coinbase by going public in 2021. Although the details of how this will happen are not yet clear, given Apifiny’s current growth trajectory, it appears to be quite realistic.

The move would be an important one, as public companies bring the kind of credibility that’s attractive to institutional investors. These developments indicate that the cryptocurrency space is maturing and provide a reputational boost that demonstrates digital assets are starting to accelerate the adoption of institutional-grade infrastructure required in traditional markets. Such an evolution means that more institutional investors will recognize that the opportunities outweigh any residual regulatory risk. As a result, this forward motion will ensure that market caps remain high enough to sustain the current bull market long into the future.

Additionally, as the market continues to mature, publicly-traded companies offer important regulatory foundations that protect institutional investments. Increased security and protection in the maturing market space will undoubtedly continue to drive investment, creating a self-replicating positive feedback loop. Companies with simple but powerful platforms like Apifiny Connect will be able to bring institutions and crypto together in symbiotic financial relationships.

With this increased market stability and growth will certainly come growth in demand for exchange functionality. In this type of burgeoning market, systems that allow for smaller exchanges to touch the larger market forces will also be exceptionally useful.

There’s no doubt that the cryptocurrency market is growing rapidly. As institutional investors enter the space, pressure on current infrastructure will continue to grow too. However, the hallmark of the crypto-sphere has been responsiveness, and companies like Apifiny will undoubtedly fill the necessary spaces while offering investors the stability that will ensure long-term participation.

Altcoin News, Bitcoin News, Cryptocurrency news, News
Julia Sakovich
Editor-in-Chief Julia Sakovich

Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.

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