With low barriers for entering, competition for digital asset exchanges is intense, with an estimated more than 10,000 exchanges now operating worldwide. This competition reduces margins for all of them and also lowers deposit and withdrawal thresholds. Add in a confusing patchwork of global regulations, and profitability challenges for digital asset exchanges loom large.
Digital asset exchanges must overcome these obstacles to attract institutional traders who will generate the sector’s next growth wave. These high-powered traders seek crypto exchanges that can give them the liquidity they need, as well as an edge in speed with instant deposit, withdrawal and transfer. Equally important, the ability to offer instant settlements would enable them to make more trades with less capital. The path forward lies in a new paradigm that brings the expanding universe of players closer together.
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