EDX Markets, a promising crypto exchange supported by major Wall Street players, is gearing up to expand its presence and attract institutional investors. CEO Jamil Nazarali recently revealed plans to establish a significant foothold in Singapore this year. Backed by heavyweights like Fidelity Digital Assets, Citadel Securities, and Charles Schwab, EDX also has its sights set on delving into the lucrative crypto derivatives market.
EDX Markets to establish its presence in Singapore
The crypto landscape is dominated by derivatives, such as Bitcoin and Ethereum futures contracts, which make up nearly three-quarters of the total market, according to CCData. The recent approval of spot price Bitcoin exchange-traded funds in the US in January sparked a surge of over 35% in derivatives trading volume.
However, EDX Markets CEO highlighted the challenges of operating within the US, citing regulatory hurdles and limited token offerings. Venturing beyond US borders presents EDX Markets with a broader range of tokens to trade, thanks to clearer regulatory environments in other jurisdictions. Nazarali emphasized the substantial opportunities outside the US, despite the robust nature of the crypto derivatives market within the country. Notably, CME Group executes approximately $4 billion worth of Bitcoin futures trades daily.
Relocating operations to Singapore enables EDX to offer perpetual futures, a popular derivative form leveraging crypto assets for potentially higher returns. These contracts allow investors to speculate on the future prices of Bitcoin and other assets, automatically renewing their investments upon expiration. Nazarali underscored the regulatory limitations in the US that prevent the offering of such products.
In Asia, BitMEX and OKX have carved out significant market shares in the crypto derivatives space, with Binance also competing in this arena. Nazarali praised Singapore’s robust regulatory framework, global financial stature, and abundant talent pool. EDX is striving to obtain full regulatory approval from the Monetary Authority of Singapore within the next 18 to 24 months.
Unlocking opportunities with its crypto derivatives market
Clients are eager for an international exchange offering, enabling trading options not currently available in the US marketplace. Presently, EDX US offers a limited selection of coins, including Bitcoin, Ether, and Litecoin, reflecting regulatory uncertainties surrounding cryptocurrency classifications as securities.
The expansion of EDX Markets underscores Wall Street’s increasing interest in crypto, despite regulatory conservatism hindering institutional investor participation. Nazarali acknowledged concerns among traditional finance firms regarding existing crypto exchanges, such as issues with asset custody and slower technology compared to traditional exchanges.
EDX’s vision is to establish a trusted, institutional-focused exchange resembling traditional finance platforms. Institutional customers in Asia have expressed dissatisfaction with existing alternatives but prioritize liquidity. Nazarali noted that building a critical mass of liquidity would attract institutional traders to EDX due to its reputable backers.
Furthermore, there is substantial demand for non-custodial crypto exchanges, indicating a preference among institutional customers to retain control over their assets. Binance’s recent launch of the Binance Web3 Wallet, a non-custodial solution interfacing with the Binance app, reflects an acknowledgment of this demand. Nazarali highlighted the reluctance of institutional customers to entrust their assets to exchanges like Binance, stressing the importance of non-custodial options.
EDX Markets’ expansion plans in Singapore and entry into the crypto derivatives market reflect a strategic move to attract institutional investors. Despite regulatory challenges and concerns about existing exchanges, EDX aims to establish itself as a trusted, liquidity-rich platform catering to institutional clientele. The demand for non-custodial solutions further underscores the evolving landscape of institutional participation in the crypto market.