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Binance Research analyzes the development of cryptocurrency brokers


Binance Research released a new report on the cryptocurrency broker industry. They said that this sector has experienced rapid growth and development, constantly coinciding with the great institutional demands of the market.

Given this, it should be remembered that Binance Research is Binance’s market research and analysis arm. Therefore, their reviews are always useful to know more details of the world of cryptocurrencies with updated and real data.

What does the report by Binance Research say about cryptocurrency brokers?

This report is titled “What are the prospects for the cryptocurrency broker industry?”. To develop it, this group had the support of Binance Brokerage and analyzed the data by observing several case studies.

Overall, they evaluated the similarities between the cryptocurrency broker industry and the traditional financial broker industry. Similarly, some of the trends regarding the outlook for cryptocurrency brokers were discussed.

Cryptocurrency broker service providers have empowered brokers to offer services to institutional participants from traditional and crypto environments”Said Binance Research.

Contributions to the development of the cryptocurrency industry

What this does is promote lateral expansion of the industry through non-crypto companies offering cryptocurrency trading. In the medium term this could further reduce barriers to entry in the industry.

While traditional brokers aim to provide a one-stop shop for financial services for institutional clients. But, when it comes to cryptocurrency services, these have been limited only to crypto derivatives and other instruments.

All of this is due to regulatory restrictions. As a result, cryptocurrency exchanges have established themselves as the center of the emerging cryptocurrency broker industry.

, Binance Research analyzes the development of cryptocurrency brokers, Forex-News, Forex-News
These are some of the traditional and fintech companies that offer crypto services, including those of cryptocurrency brokers. Source: Binance Research

Binance Research added: “The emerging cryptocurrency industry has seen the development of two categories: top brokers and broker service providers. On the other hand, fintech and FX brokers have shown a greater appetite to get more involved in the space, following initial attempts to offer crypto CFD trading to clients.«.

In this case, the main cryptocurrency brokers are companies like Coinbase and Paxos. These are aimed at providing compatible cryptocurrency trading services to financial technology companies, banks and similar institutions.

On the other hand, broker service providers are those like Binance Brokerage that provide crypto services, such as provision of liquidity and custody, to other brokers that serve individual investors.

Final comments

Large cryptocurrency exchanges have launched top-notch brokerage services to provide institutional investors with custody, aggregation trading, and other services.

All of this in response to the persistent demand of institutional investors for trading and liquidity services by the main brokers. The truth is that the world of cryptocurrencies generally offers easier access to trading venues than conventional markets.

Meanwhile, cryptocurrency broker service providers have allowed traditional brokers to offer services to institutional participants.

, Binance Research analyzes the development of cryptocurrency brokers, Forex-News, Forex-News
Business Comparison: Traditional vs. Broker Industries cryptocurrency brokers. Source: Binance Research

Thus, the state of the cryptocurrency brokerage industry is changing rapidly, especially due to the current influx of forex brokers and fintech companies into the world of cryptocurrencies.

Hence, the pioneers in the crypto brokerage industry have gradually built an underlying framework that has become increasingly similar to that of the traditional financial sector.

However, if you want to know more details about the report, you can find the full Binance Research report here.

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