Crypto Trading Report 2022

The preferences of institutional market participants in execution venues for trading digital assets.

This report sheds light on the global landscape of trading execution venues for digital assets and aims to provide insights into the current trading rationales of institutional market participants in this space. It offers insights into where institutionals trade digital assets and explores the factors underlying their choices, including the advantages and drawbacks of each of the various digital asset trading venues and execution alternatives.

By sharing these insights with the broader digital asset industry, PwC’s goal is to encourage the adoption of sound practices by market participants as the ecosystem matures. These practices could lead to improved credibility and be a driver for adoption.

For the Crypto Trading Report 2022, PwC partnered with Finery Markets and AIMA to survey institutional players engaged in digital assets to identify their preferred platform for trading and executing orders for digital assets.

The report starts out by outlining some basic concepts and the current landscape of execution venues for digital assets. After that it provides a deeper dive into the prevalent execution venue options, such as centralised and decentralized exchanges or over-the-counter (OTC) alternatives.

Having explored the intrinsic advantages of the various venues, the report analyses how professional practitioners choose venues. By comparing the characteristics of the venue, the institutional actors and their choice, the report will highlight the actors’ deliberations and priorities.

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Eight key takeaways

Location: Jurisdictions promoting the digital asset landscape and refraining from restrictive regulation lead the way in terms of the number of licensed institutional investors in this survey.

Company type: Over 50% of the companies that have traditionally traded in financial instruments are now engaging in trade in the digital asset landscape.

Licensed/regulated: More than half of the respondents to this study held a license from the supervisory organisation in their country of domicile.

Starting point: A similar number of respondents entered the digital asset market in 2021 as opposed to the total of the previous three years.

Monthly trading volume: Similar to the number of investors entering the digital asset landscape, the highest number of respondents say the monthly volume of digital assets they trade is less than USD 10 million.

Number of trading venues: Most investors use more than one venue, and about one quarter of respondents said 10 or more.

Most popular centralised exchanges: Binance was the most popular.

Most popular OTC desks: B2C2 was the most popular.

Switzerland has become one of the world’s most favorable jurisdictions for digital assets trading venues by offering a robust legal framework.

Dr. Jean-Claude SpillmannDirector, Head Asset & Wealth Management and Banking Regulatory, Legal, PwC Switzerland

Insights from the report

What else is covered in the report:

Overview of market structure
Inherent security features
Execution venues
Insights and findings
Conclusion/Outlook

The study

The study offers insights into where “institutionals” trade digital assets and explores the underlying rationales such as counterparty risk, privacy, execution quality, liquidity and transaction fees.

Execution & Liquidity quality matters the most – 67% of participants consider Execution & Liquidity Quality one of the most important criteria for choosing an execution venue
Fragmented market – almost 50% of participants are trading on five or more venues
Room for improvement – over 65% of participants are not satisfied with their current setup

The survey

The survey conducted by Finery Markets and AIMA recorded the market behaviour of 77 institutional market participants. It offers insight into the decision making of institutionals when selecting an execution venue.