Citadel Securities, considered by many to be one of the most influential in the field, is set to extend its business to provide liquidity for cryptocurrency exchanges and exchanges across a wide range of digital coins. This represents a monumental shift for the firm, which has focused its efforts on equity and other such instruments for quite some time now.
Since President Trump’s endorsement of cryptocurrencies charged interest and regulatory clarity for digital assets, Citadel Securities hopes to take advantage of this trend where it can act as a market maker, supporting them in trading in this sector where market transparency and liquidity could be improved.
The hope is that Citadel Securities, along with Virtu Financial Inc., will get this plan up and running during 2022, allowing retail brokerages of Fidelity Investments and Charles Schwab Corporation to facilitate cryptocurrency trading in a way that’s more open and secure while alleviating liquidity and market transparency concerns.
By June 2023, the joint efforts resulted in the establishment of EDX Markets, a cryptocurrency exchange backed by Citadel Securities, Fidelity, and Schwab. The platform initially allowed trading in four leading digital currencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. What really came to mark the distinction of this platform, though, was adopting a non-custodial model whereby it didn’t hold customers’ digital assets directly, thus upping security and lowering risks that would arise from centralized custody.
The launch of EDX Markets was a major step for Citadel Securities’ foray into the crypto arena. The exchange sought to offer a stable and effective trading platform for institutional and retail investors alike, taking advantage of the technological and financial expertise of its sponsors.
The launch also highlighted an increasing trend of traditional financial institutions seeing the potential in digital assets and wanting to close the gap between traditional finance and the emerging cryptocurrency market.
EDX Markets made headlines in January 2024 as it planned an expansion to the Asian market through the launch of an exchange based in Singapore. The move, backed by noted venture capital entities Sequoia Capital and Pantera Capital, was meant to take advantage of the fast-growing Asian crypto space and address the growing demand for the trading of digital assets within the region.
Citadel Securities’ entrance as a cryptocurrency trading market maker will mean the beginning of a new procession in the world of digital assets. Citadel Securities’ long history as a market maker and credibility in providing liquidity in the traditional markets would most likely benefit the cryptocurrency trading exchanges in terms of efficiency and steadiness.
The move could also be a trigger for other credible financial institutions to enter the digital asset universe, which might lead to further rapprochement of cryptocurrencies with mainstream status.
As Citadel Securities dives into this new venture, market participants will watch closely how the firm influences cryptocurrency trading behavior and liquidity levels. The success of this trial might be an opening up to additional institutional presence within the crypto sphere, igniting confidence and greater use by investors globally.
