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- The Adoption of Digital Asset Trading report published by Acuiti management intelligence platform states that the trading firms have come to the terms to believe that the Bitcoin’s emergence holds a lot of offerings in trading.
- The survey among service providers showed that there was a 26% adoption of digital assets among sell-side service providers which was greater than the traditional trading firms with 17% adoption rate.
Senior trading executives showing interest in the exploitation of what crypto industry has got to offer, particularly the Bitcoin cryptocurrency has shown a positive rise as per a survey on March 31.
Trading firms realise the opportunites Bitcoin offers
Bitcoin (BTC) is doing wonders with the unusual benefits it is offering. It is a complete digital currency that enables new payment systems consisting of peer to peer payment networks that doesn’t need the central authority for it to operate meaning that it allows payments to be made without the involvement of financial institutions.
The Adoption of Digital Asset Trading report published by Acuiti management intelligence platform states that the trading firms have come to the terms to believe that the Bitcoin’s emergence holds a lot of offerings in trading such as bringing in a new ecosystem of trading venues, digital asset market makers, hedge funds, custody providers and many more.
The report also claims that the Bitcoin after having recovered from multiple declines, after having reached all-time highs of over $19,000 in the year 2017, and after having cleared the roadblocks including the drop in price of Bitcoin by more than 50% from its highs, it has proven why it must be seeked not as a trend but as a solution.
Survey shows a rise in trading firms adopting digital assets
The survey among service providers showed that there was a 26% adoption of digital assets among sell-side service providers which was greater than the traditional trading firms with 17% adoption rate. Adoption is defined as enabling the trade and clearing of at least one digital asset spot.
Nearly half the trading firms shown to trade Bitcoin
As per the report, the crypto trading firms have nearly all been trading digital assets for over two years. All the surveys of the crypto trading firms showed that the trading consisted a wide range of cryptocurrencies amongst which, half of them showed to trade Bitcoin derivatives. 57% traded Bitcoin derivatives and 29% traded Ethereum derivatives as per the survey of the traditional trading firms trading digital assets.
Another finding revealed the preference of currency pairs by traders of digital assets, BTC/USD was the most preferred followed by ETH/USD. XRP/USD was ranked fifth although XRP was the 8th most popular digital asset.
Major concerns revealed
The survey of all the trading institutions recognised their concerns to be Fear of the damage, High volatility, Concerns over custody, High margining and pre-margining requirements, Non-existence of transparent price formation, risks associated with exchange and Security of exchange and the Fears over hacking.
For the service providers, Concerns over AML & KYC of exchanges and Fear of damage were the major reasons for not offering digital assets. Whereas for sell-side respondents, the concerns were High volatility in digital assets and Lack of internal expertise.
What does the future have in store?
Although the Current adoption rates showed relative low with less than a fifth of traditional firms trading digital assets, 90% of the traditional trading firms in the next 2 years will consider the opportunity Bitcoin has got to offer and 45% are planning to consider the idea in a time of six months. Also based on the survey, the key learning it has grasped is to expand the offerings to the firms and other service providers in the inclusion of a range of markets. Also, the future of digital asset trading is likely to be bound or limited to CME.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
