Since the first cryptocurrencies were launched a decade ago, the market has gone from being dominated by retail traders to Wall Street professionals seeking to balance their portfolios with a brand new asset class.
These institutional traders are typically managing large accounts on behalf of clients, and need advanced credit, execution, and custody functions to minimize market impact and implement sophisticated risk management techniques.
eToroX is an institutional-grade exchange for crypto assets, giving sophisticated traders the security and advanced tools needed to successfully trade this new asset class.
Traditional equities and forex exchanges are legally mandated to deliver the best possible order execution—using smart routing and advanced order types to ensure professionals get their orders filled efficiently.
This focus on best execution hasn’t yet spread to the cryptocurrency market. Digital asset exchanges lack sophisticated settlement infrastructure, with basic order types and slow connectivity making it difficult to implement automated algorithmic strategies. Institutional traders are also disadvantaged by shallow liquidity, which often dries up during times of high demand—making it difficult to buy and sell without impacting the price.
eToroX has the technical capacity—ultra-low latency, deep liquidity, and scalability—to allow sophisticated traders to seamlessly bring crypto into their existing portfolios, and trade this new asset class with the same best execution focus of traditional markets. Advanced order types allow traders with large accounts to minimize market impact, and an institutional-grade FIX API supports the most sophisticated automated trading strategies with the ability to process up to 100,000 orders per second.
To offer the same efficient order execution as pioneering equities exchanges, eToroX employs the innovative inverted fee model. Research from the University of Melbourne found that inverted venues in equities markets have increased liquidity, and can offer traders better price efficiency. This makes the inverted fee model ideally suited for the shallow liquidity and high spreads typically found in the cryptocurrency market.
Combined, these innovative features provide the efficient order execution needed for professionals to deploy sophisticated strategies and trade effectively with large size.
Ironclad custody and full compliance.
Countless hacks and security breaches have given crypto exchanges a controversial reputation, and only a few small jurisdictions have stepped in to offer regulatory oversight. This has deterred cautious institutional traders, who can’t stomach high levels of counterparty risk and are legally required to store funds with a regulated custodian.
eToroX is fully regulated under Gibraltar’s pioneering DLT license. The Gibraltar Financial Services Commission holds all blockchain businesses on the Rock accountable to the same standards as traditional financial institutions, with cryptocurrency exchanges subject to the same audits and security procedures as banks. A close relationship with the EU makes Gibraltar well-positioned to adapt to the ongoing rollout of global regulations governing cryptocurrency, helping institutional traders to stay compliant and avoid regulatory scrutiny.
Customer assets held with eToroX are custodied in a military-grade cold storage solution. Security threats and suspicious transactions are monitored with defensive technology from the forensic blockchain analysis firm Chainalysis.
To minimize counterparty risk, traders can boost their trading power by tapping a collateralized credit line instead of depositing more funds.
Retail investors have relatively easy access to crypto assets. They can verify their identity with a passport photo, and trade funds under their own name from their own wallet. Despite this, retail crypto exchanges are notorious for prolonged onboarding times, with verification times stretching to weeks while traders wait for KYC checks to be completed.
For institutional traders managing money on behalf of clients, the KYC process is more complex. Corporate KYC requires the checking of numerous company documents, including individual checks for beneficial owners— creating even more potential for delays. Then, when it comes time to fund the account, conservative banking partners can be reluctant to support access to this new asset class.
eToroX offers institutions a frictionless onboarding process. New clients are guided step-by-step through the corporate KYC process, and documents are checked by a dedicated team. Traders can easily fund their accounts by instantly switching dollars for stablecoins through a secure portal provided by the regulated Signature Bank. Transfers can be made with no fees, 24 hours a day, seven days a week.
Once fully verified and funded, traders on eToroX can use institutional-grade tools to swap all the top cryptocurrencies for major world currencies and commodities including silver and gold.
With these crypto assets at their fingertips 24/7, professional traders on eToroX are in the best possible position to capitalize on the new financial revolution.