EDX Markets, an institutional crypto trading venue with a central clearinghouse, had record volumes on its US spot crypto market as it prepares to launch a perpetual futures venue in Singapore.

Jamil Nazarali, chief executive of EDX Markets, told Markets Media that the growth in spot volumes has outstripped the increase in  market volumes. “Since the end of the third quarter and the US election we have seen incredible growth and there is strong sentiment in the market about the future regulatory environment,” he added.

EDX provides separate quotes  for institutions and retail intermediaries and said it has traded and cleared $39.8bn of member volume since the start of this year. In November EDX said it facilitated record volume with members trading over $685m in a 24-hour period. Volume in the month-to-date has reached $5.8bn.

Average daily volume at EDX grew 59% in the third quarter, while industry volume in spot bitcoin and ether declined by 14.8% over the same period according to the firm. EDX has also recently introduced SHIB and DOGE coins which have contributed to the rise in volume.

The firm also recently introduced a new proprietary matching engine, which Nazarali described as being instrumental in EDX’s ability to service clients as the technology had previously been outsourced. “Our product lifecycles have speeded up and we have been able to onboard customers more quickly,” he added.

EDX Clearing for spot crypto launched in  October 2023 and settles trades every day at noon. The firm has also created the capability to allow customers to move some of their assets off the platform before noon if they need to, which improves collateral mobility,

“One of the real strengths of our business model is that firms do not have to pre-fund trades,” said Nazarali. “If clients are trading over-the-counter with multiple counterparties, EDX can net all the settlements which also improves capital efficiency.”

In clearing spot trades, EDX acts as a central counterparty between the buyer and seller so members do not need to set up credit lines and bilateral agreements with each other in order to trade. All trades matched on EDX’s spot market settle on a blockchain through EDX Clearing in a single net process, increasing operational efficiency and reducing the upfront capital required to trade.  Assets are held in a network of independent digital custodians, in a similar way to traditional finance

Perpetual futures

Nazarali continued that the build of EDXM Global, its perpetual futures venue in Singapore, is going well and is on track to launch in early 2025. This follows the debut of its Singapore-based settlement service in May this year which streamlines the settlement of over-the-counter transactions and reduces counterparty risk.

The new venue will launch under the leadership of  EDXM Global’s new chief executive, Kai Kono, who has held leadership roles at institutional digital asset firms, including Zodia Custody.

“The specifications are very close to what we have for our US spot matching engine,” Nazarali added. “We are building the features that are unique to the perpetual futures market related to new intelligence, particularly on the risk management side.”

There will be some overlap in EDX’s global institutional customer base between the two venues, but they will remain as two separate liquidity tools. The key focus for 2025 is growing both the perpetual futures and US spot business according to Nazarali. EDXM Global will launch with perpetual futures contracts in bitcoin and ether, and additional futures in solana and XRP will be subsequently added.

The crypto industry is optimistic that the incoming administration in the US will introduce a favourable regulatory framework for digital assets.

For example, Rick Wurster, president and incoming chief executive at Charles Schwab, told Bloomberg that the retail broker will offer spot crypto trading once the regulations change.

“Schwab is one of our founding investors and we are really excited about their participation,” said Nazarali. “There are a number of other firms that have not made public announcements, but have given us indications that they are revisiting their plans.”

Alongside Schwab, the other founding investors in EDX include Citadel Securities,  Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial. Nazarali argued that EDX is well positioned due to its combination of both traditional finance and crypto experience.

“This gives us a leg up,” he said. “A lot of the larger crypto-native firms have also expressed strong enthusiasm for our business model because they understand the value of central clearing, and being forward on regulation.”

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