Brokers & FinTech, Crypto & Digital Assets, FX & Currencies
eToro’s Professional Crypto Exchange Adds Institutional-Grade Product Suite, Launches Inverted Fee Model
23 Jul 2020
Offering includes advanced FIX API, cold storage custody solution, Credit Line, special order types, and brand new high performance matching engine
eToro, the multi-asset platform with over 14 million registered users globally, has added several enhanced trading and risk management tools to its crypto exchange, eToroX. This new set of tools is targeted at the growing segment of professional and institutional crypto traders, which has a unique set of trading and commercial requirements.
Employing a unique and progressive inverted “Taker-Maker” fee model*, eToroX flips the traditional “Maker-Taker” pricing structure, by allowing a rebate to be paid to takers who execute market orders above certain volumes, rather than them paying for the privilege of trading. Research from the University of Melbourne examined the few traditional exchanges that adopted inverted fee models, and concluded that the net impact of those models on market quality is positive, showing price efficiency and an increase in liquidity with inverted venue market share, with a decrease in short-term volatility.
As part of its focus on professional and institutional traders, and their requirements for better risk management tools, eToroX has added a range of new Order Types, to amplify user abilities in trading tokenized FX, commodities, and crypto 24×7, including FOK, IOC, GTC, and GTD, as well as special Iceberg orders. It has also established a highly secure cold storage custody solution, of the same high standard as those utilized by traditional financial houses. Further tools being introduced include an institutional-grade API with FIX protocol, in addition to REST and WebSocket protocols, and a credit line program** for spot trading, enabling users extended access to eToroX’s deep liquidity markets, and allowing them to trade with up to ten times more volume.
According to Peggy Sullivan, Senior Policy Advisor at the U.S. Securities and Exchange Commission, “to have more mainstream adoption of the cryptocurrency or the digital asset space, we need to make it easier for the institutional markets to enter.” This is confirmed by a report from Aite Group, a global research and advisory firm, which finds professional crypto traders to be in “desperate need of institutional-grade tools.”
eToro has published a new position paper, describing eToroX’s new approach, and the external research and interviews with industry leaders that motivated it. The position paper outlines all the main barriers to institutional adoption of crypto and how eToroX has responded to them, and includes comprehensive details of the new resources the crypto exchange has incorporated to enable institutional-grade traders looking to transition from the world of traditional finance to crypto.
Yoni Assia, CEO of eToro, said, “2020 is proving to be a significant year for institutional interest in crypto investing. The data is showing that institutions are buying the biggest cryptos by market cap such as bitcoin and ethereum, in a bid to position themselves ahead of the next bull run. Furthermore, due to the unique way in which this year is playing out, investors are seeking uncorrelated alternative investments, and cryptoassets seem to be the ideal answer to this for many.”
Vice President of Business Solutions, Doron Rosenblum, added, “Institutional investors have not been able to enjoy a similar quality of trading tools in the crypto industry as those they rely on in traditional asset classes. We want to address these concerns directly, as outlined in our position paper, in a bid to open up the crypto ecosystem to both institutional participants as well as pro traders. Institutions are now much more aware how a 24×7 risk management mechanism allows the management of risks on a constant basis, which is only possible via the crypto ecosystem. We are seeing this in eToroX’s data, where the most traded cryptoassets on our platform by institutional investors are stablecoins pegged to commodities and Fiat currencies. We have launched these initiatives today to give these types of traders access to deep order books at a competitive price.”
Institutional traders joining eToro’s crypto exchange will also enjoy a VIP onboarding process, with dedicated, one-to-one service.
eToro launched its on-chain crypto exchange in 2019 as part of the company’s commitment to the belief that one day all investable assets will be tokenized and traded on the Blockchain.
* Click here for a full breakdown of our fees.
**The eToroX Credit Line program is subject to our acceptance and suitability policy.
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