Out With the Old

It may be just over 12 years old, but crypto provides equal access and opportunities to all participants – from the largest financial institution, to those with only $5 to spend. With an estimated 100 million cryptocurrency wallet holders around the world and counting, it should come as no surprise that legacy players from the stock market and beyond are now beginning to revamp their offerings to make finance fair.

In our latest report, FEX Intelligence looks at the structure of both traditional and crypto markets, the possible inefficiencies of traditional markets, and how crypto asset markets are improving access and liquidity to people worldwide. We also examine how the technology underpinning crypto will force legacy markets to finally catch up.

Key Takeaways:

• Eliminating Disadvantages – In traditional markets, a person has to work through a clearing house, broker and/or an advisor. Even with regulations, intermediaries have the upper hand and can create disadvantages for smaller players. Some market mechanisms in traditional markets, while well intentioned, can have unintended consequences. By contrast, the breadth of crypto markets grants liquidity providers true price discovery.

• Legacy Market Inefficiencies – Whether it’s the price of assets being inflated through central bank intervention or high-speed trading tactics affecting price, traditional markets carry risks and inefficiencies. Comparatively, crypto markets are driven by open-source code that gives equal access to everyone regardless of their portfolio size.

• Tokenization, Order Flow & Process – Both centralized and decentralized exchanges mark a major step forward in making markets more level and efficient. Both provide improvements in transparency, settlement speed and reduced costs by sending orders directly to the exchange’s order book. In contrast, traditional markets can have as many as three intermediaries who hold influence over order execution which can lead to settlement issues in times of volatility and increased counterparty risk.

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