Institutional crypto trading – how to choose the best institutional crypto trading platform

Crypto industry commenced 2022 with a colossal inflow of $193 million in institutional investment in the early quarter of the year. Bitcoin, for obvious reasons, commanded the maximum inflow. Interestingly, last year only, America’s biggest crypto exchange witnessed an awe-inspiring 10x surge in institutional trading that amounted to a whopping $1.14 trillion compared to $120 billion the previous year! This upward swing in institutional trading and investment in crypto is certainly a welcome move- experts have stressed that the massive rise in institutional trading in crypto is a key reason behind the astronomical rise of the overall industry. Crypto exchanges not only cater to retail traders but also double up as institutional crypto trading platforms for institutional traders.

We will discuss in detail about institutional crypto trading and institutional crypto trading platforms but before that, let’s have a look at the key figures about the rise of institutional trading in crypto.

Facts and figures about institutional trading in crypto:

  • A recent study has revealed that around 70% institutional investors are looking forward to crypto assets as reliable investment vehicle
  • Crypto industry received $9.3 billion worth institutional investment in 2021 that marked around 36% surge compared to that of 2020
  • As of 2022, there are 130+ institutional crypto trading and investment products in the current digital asset industry
  • Bitcoin is the unanimous top favorite of institutional investors and traders
  • Institutional investors and traders currently own around 8% of total BTC supply

Overview of institutional trading in crypto

Irony is, while it’s the retail traders that were the first to roll the ball in the crypto scene, yet cut to the 2020s, institutional traders are calling the shots. A good bunch of crypto exchanges now have a separate wing for institutional crypto trading platform to ensure special attention for high net-worth institutional clients.

Read more: Is trading cryptocurrency more profitable than forex?

What is institutional trading in crypto?

When it comes to trading, primarily, there are two types- retail traders and institutional traders.

Retail traders are individual traders who trade securities or cryptocurrencies for their personal accounts. But, institutional investors trade cryptos or securities on behalf of a commercial institution or organization. When it comes to institutional traders, an institutional crypto trading platform generally caters to ETF issuers, corporate organizations, fund managers, asset managers, liquidity provider companies, and so on.

Some of the biggest companies in the world have invested in institutional crypto trading and the numbers are only rising.

Institutional trading gaining traction in crypto space

One of the major reasons behind the inspiring rise of institutional trading and investment in crypto is the futuristic aspect of the cryptocurrency technology. Built on breakthrough blockchain technology, crypto assets have undoubtedly heralded a revolution in the global finance, monetary, and payment space. A major section of institutional investors are deeply optimistic about crypto’s transformative impact- not just on the fiscal market but in the global society overall. Coupled with the futuristic aspect, crypto’s aggressive volatility is another chief reason behind the massive surge in institutional investment of late.

Read more: Best crypto to HODL

Rise in institutional investing and trading is certainly a positive sign for the crypto industry. When leading business corporations and institutions show faith in a particular asset, it accentuates the credibility quotient of the particular asset. It scales up the trust factor, thereby pulling in more investors (both institutional and retail) into the scene.  Rise in the number of investors and traders in institutional crypto trading platform propels a big surge in trading volume that further helps to attain more stability.

Tips to choose the best institutional crypto trading platform

Crypto exchanges, precisely centralized crypto exchanges, serve as a major institutional crypto trading platform today. Institutional investment and trading usually involve massive inflow and outflow of funds – and a regulated institutional crypto trading platform is a must here. Centralized crypto exchanges are governed by a centralized single authority and they also operate under a regulated framework.

The following brief outlines the top tips to remember while looking for the best institutional crypto trading platform.

  1. Experience in institutional trading

Institutional crypto trading is a niche area that demands specialized catering and service. Thus, not every other crypto exchange out there can be a professional institutional crypto trading platform.

So, don’t sign up with just every other exchange you come across online. You have to find a reliable centralized crypto exchange that has created a separate specialized division for institutional crypto trading platform.

Put simply, find a credible centralized crypto exchange that holds vast experience, tools, systems, and required infrastructure for seamless crypto trading for institutional traders.

  1. Regulation

As mentioned previously, an institutional crypto trading platform has to shoulder high net-worth trading activities. Thus, you need a highly regulated institutional crypto trading platform here that can assure completely compliant operations for a secured trading experience. A poorly regulated institutional crypto trading platform could easily be the target of hackers and other such nefarious elements.

Your chosen institutional crypto trading platform should be a recognized qualified custodian.

  1. Security measures

It’s compulsory to check the security measures adopted by your chosen institutional crypto trading platform. Institutional investors and traders usually trade in millions and billions – they need advanced security from the institutional crypto trading platform to ensure the safest trading experience possible.

Read more: What is a crypto trading bot

Make sure your chosen institutional crypto trading platform has adopted these measures-

  • 100% cold storage of funds
  • Auditable asset addresses
  • Strong KYC measure
  • Industry-leading AML/BSA program
  • Extensive insurance coverage for funds

Also, your chosen institutional crypto trading platform should be able to boast certified industry-leading security management infrastructure.

  1. 24/7 dedicated care for institutional traders

You will know that an institutional crypto trading platform is ready to offer the needed specialized service to institutional traders when it can show a separate specialized unit for institutional traders. And, that covers a dedicated 24/7 care team especially skilled in handling institutional relationships.

  1. Seamless trading experience

The best institutional crypto trading platform will usually assure a smooth and convenient trading experience for institutional traders. Make sure your chosen institutional crypto trading platform provides instant and anytime access to digital assets, facility of same-day withdrawal, and also instant settlement of trades. On a final note, study the reviews and ratings of multiple institutional crypto trading platforms before choosing the final one.

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