As the U.S. Securities and Exchange Commission (SEC) increases its supervision of the cryptocurrency market, some traditional financial institutions, such as Citadel, Fidelity, and Schwab, have begun to enter this emerging market. The exchange EDX supported by these institutions only trades Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, all of which are SEC-certified non-securities assets.
First, we need to understand why these financial giants choose a trading platform like EDX.
EDX is a 'non-custodial' exchange, meaning it does not hold its clients' cryptocurrencies directly, but uses third-party custodians. This setup allows EDX to target the needs of large financial institutions that seek exposure to cryptocurrencies but have reservations about centralized crypto service providers. Second, EDX operates as a platform that connects a network of companies that execute and settle trades between crypto assets and fiat currencies.
While it does not yet support trade settlement, it plans to launch a settlement business later this year, which will enable it to settle trades. The moves by these traditional financial institutions, as the SEC clamps down on the cryptocurrency market, show that institutional interest in the long-term crypto market remains firm despite the difficulties and regulatory concerns facing the market. This can be seen from the fact that BlackRock applied to launch the first Bitcoin spot exchange-traded fund (ETF) in the United States and EDX successfully completed its second round of financing, attracting new investors such as Miami International Holdings.
Citadel, Fidelity, and Schwab are heralding a new attitude in the financial industry toward the cryptocurrency market. As more financial institutions enter the space, we are likely to see more innovation and standardization, which will help the cryptocurrency market mature and stabilize.
The participation of these companies will bring more capital and credibility to the cryptocurrency market and may help attract more institutional investors to the market. However, it also represents a deeper control of the cryptocurrency market by traditional financial institutions, which may have a significant impact on the future direction of the market. Overall, the SEC's crackdown on the cryptocurrency market does not seem to have curbed the interest of traditional financial institutions. Instead, these institutions may be looking for opportunities to take advantage of the new regulatory environment and establish a stronger position in the cryptocurrency market.
As soon as the news came out yesterday, Bitcoin immediately rose by 7%. From the technical line chart, it is close to the 25-day moving average of the weekly line, and there is no big problem. It is expected to break through the previous high of 31,000. You can refer to my article last week.
