Brandon Mulvihill (Crossover Markets) on the future of market structure in the USA (EP.601)
Mar 10, 2025
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Brandon Mulvihill, co-founder and CEO of Crossover Markets, discusses the future of market structure in the U.S. crypto landscape. He explores how banks are adapting to regulatory changes and the emerging competition among exchanges. The conversation highlights the potential of Electronic Communication Networks for price discovery and the role of traditional institutions in the crypto space. Mulvihill also shares insights on Crossover’s growth plans, including integrating AI to enhance trading efficiency and liquidity by 2025.
The evolving regulatory landscape in the U.S. is facilitating increased participation of traditional banks in the cryptocurrency market.
Crossover Markets' execution-only model aims to enhance trading efficiency for institutions by allowing them to operate across multiple platforms without counterparty risks.
Deep dives
Future of Digital Asset Trading
The discussion focuses on the evolving structure of the digital asset trading market in the U.S., particularly in light of regulatory changes post-election. The expectation is that new frameworks for stablecoins and market structure will provide a more welcoming environment for digital assets. Institutional interest in this space has surged, with many banks showing readiness to engage, driven by a more favorable regulatory landscape. This momentum may significantly impact liquidity and trading practices, making the U.S. a leading player in the digital asset arena.
Crossover Markets' Unique Approach
Crossover Markets operates as the first execution-only trading venue for institutions, meaning it does not act as a counterparty in trades. This model aims to enhance price discovery and risk transfer for institutional participants using the CrossX platform. The firm differentiates itself from traditional exchanges by implementing an execution model that allows institutions to trade freely across various platforms without being bound to a single exchange for both buying and selling. This innovative approach is expected to attract a diverse range of institutional investors looking for efficient trading solutions.
Regulatory Challenges and Opportunities
The conversation touches on the significant impact of recent regulatory changes that may ease traditional banking participation in the cryptocurrency market. A key part of this is the expectation that banks will develop their capabilities to safely handle cryptocurrency custody and trading. The removal of previous prohibitive regulations like SAB-121 paves the way for banks to enter the crypto space, with some institutions already planning to offer custodial services by 2026. These developments could dramatically reshape the liquidity landscape and institutional involvement in crypto trading.
Institutional Demand and Market Structure
There's a growing consensus that separating the roles of custodians, market makers, and exchanges will improve the digital asset trading landscape, particularly for institutional clients. Current models often lead to inefficiencies, particularly during market volatility, where retail investors may be adversely affected when trading alongside institutional players. The conversation emphasizes the need for regulatory frameworks that adapt best practices from traditional financial markets to protect retail consumers while catering to institutional demands. This bifurcation of services could lead to enhanced trust and participation in the crypto ecosystem.