Today many businesses and companies inject significant capital into the crypto market, propelling its development and growth. Large capital influx increases the liquidity of the crypto markets, making this space even more attractive for investors. In this article, we will discuss the ways of institutional crypto engagement and some services that meet institutional needs.
How Institutions Use Crypto?
Companies and businesses may join the crypto sector in these ways:
- Investment – institutions may invest in cryptocurrencies directly, holding them as part of their investment portfolio.
- Crypto institutional trading – they participate in the buying and selling of assets, either through traditional exchanges or OTC platforms.
- Liquidity provision – an investor can become a crypto exchange market maker platform, acting as a liquidity provider and facilitating smoother trading by actively placing buy and sell orders in the market.
- Payment methods – businesses use digital assets as a means of payment, expanding their reach to a broader audience willing to transact with cryptocurrencies.
- DeFi – institutions may invest in decentralized finance protocols, providing crypto loans and insurance based on smart contracts.
- ETF – they may use exchange-traded funds that track the performance of cryptocurrencies, providing exposure without directly trading the underlying assets.
Mandatory Institutional Services
An institutional crypto trading platform is a place where investors buy and sell digital assets. An example may be Binance Institutional or WhiteBIT crypto exchanges. To handle transactions from corporate clients, such platforms must possess sufficient liquidity, custody solutions, and compliance with regulations.
Custody services for institutional crypto investors involve secure storage and management of digital assets. Trusted third-party providers safeguard these assets, addressing security concerns and regulatory compliance.
Companies and entities are always under scrutiny to comply with governance, so they work within regulation frameworks and need an institutional crypto exchange that complies with the laws.
Institutional crypto trading is a driving force in the digital asset landscape, attracting significant capital for market growth and liquidity. As businesses adopt various strategies, from direct investments to DeFi and ETF usage, essential institutional services like secure custody and regulatory compliance remain imperative.