Global forex trading encompasses more volume than any market in the world. Trading more than $5 trillion daily (Forex Market Size: A Trader's Advantage) for numerous national currencies, Forex markets require lightning-fast trade execution, pinpoint spreads, and vast experience in one of the world’s most lucrative markets.

For Todd Crosland and Paxton Powers of the renowned Interbank FX forex firm, decades of experience in the FX market was a profound opportunity to translate into the maturing crypto markets.

And, indeed, the crypto markets still have some necessary maturation ahead.

As recently detailed by CoinMetrics (Coin Metrics''' State of the Network: Issue 19), spreads on crypto spot exchanges can deviate from parity drastically during times of market stress, particularly when waterfalls of leveraged positions on derivatives platforms (i.e., BitMEX) are auto-liquidated in mere minutes -- further fueling price momentum in the triggered direction.

Such an immature market microstructure doesn’t even take into account the subpar order matching engines of many exchanges. For example, BitMEX -- the leading Bitcoin derivatives platform -- has had persistent problems (https://www.reddit.com/r/BitMEX/comm..._problem/)with its order-matching engine, cited by some prop shops and institutions as being virtually unusable during times of high activity.

As a result, it’s not surprising that institutions are hesitant to dive into crypto markets, knowing full-well that manipulation is much easier than the regulated and mature market infrastructure of legacy financial markets.

With critical problems still facing the crypto markets, Crosland and Powers decided to launch CoinZoom (CoinZoom - Digital Asset Gateway), an institutional-grade crypto-fiat exchange that is fully regulatory-compliant in multiple jurisdictions.

Building the Necessary Exchange Infrastructure

A common axiom in financial markets is that liquidity begets liquidity. Bootstrapping liquidity is challenging, and in the crypto markets, it is largely a product of network effects where exchanges that arose in prominence during the ICO craze of 2017 remain the industry leaders in volume and liquidity.

However, for CoinZoom, the experience of attracting liquidity is sure to be markedly different than its competitors in the exchange arena.

“We’re a registered Money Transmitter and Money Services Business in the US,” details CoinZoom CEO, Todd Crosland. “Together with our connection to more than a dozen institutional OTC desks and market makers, along with our relationships from Interbank FX, we have deep liquidity pools integrated from around the world.”

The importance of liquidity cannot be understated. Crypto exchanges jump through hoops to appear more liquid than they are, falsifying order book data, encouraging wash trading, and introducing trans-fee mining -- all in an effort to attract more traders. As a result, cryptocurrency markets are rife with fake volumes, reported by Bitwise to be as high as nearly 95 percent (95% Of Reported Bitcoin Trading Volume Is Fake, Says Bitwise) of total volumes.

Besides its robust relationships with financial institutions as a boon for attracting initial liquidity, CoinZoom is also offering a suite of financial products and services with its exchange to appeal to more mainstream crypto users.

For example, the exchange is offering CoinZoom Staking, where customers can earn passive income from 6% - 13% annually, by just holding certain cryptocurrencies in their accounts. Staking will initially be available for Dash (DASH), and Algorand (ALGO), with additional coins coming soon. CoinZoom also offers ZoomMe, a free Peer to Peer, cross-border payment gateway to instantly send both fiat and crypto, mobile trading applications, and a Visa-backed debit card with rewards programs.

But attracting liquidity is not the only problem with liquidity; it’s the capacity to support highly liquid activity.

Drawing from their decades of experience in the ultra high-frequency world of FX trading, CoinZoom understands the type of infrastructure required to support institutional-grade trading of assets. Additionally, their knowledge encompasses the requirements for multiple types of assets trading simultaneously, like what will be ongoing with their support of stablecoins, cryptocurrencies, and security tokens -- issues not within the purview of most other crypto exchanges.

“We deploy advanced order analytics efficiently match and execute orders across the platform,” details CoinZoom CIO, Paxton Powers. “Our AI system is a pattern recognition system that identifies and alerts traders of pending market entry opportunities and how to react to market movements in the cryptocurrencies they are trading.”

Increasingly, institutions and professional traders are searching for an exchange platform that provides an all-inclusive experience.

Where derivatives, spot trading, fiat gateways, security tokens, and liquidity are all coalesced under one umbrella, is where institutions will move. CoinZoom thoroughly believes that its platform is the tipping point institutions have been looking for, and their vast experience and relationships in the forex market should only serve them admirably in convincing financial entities to jump into the crypto market.

Where maturity is necessary for the further development of the crypto markets, the progress made by native crypto exchanges appears insufficient to convince both regulators and institutions of the asset class’ staying power so far.

CoinZoom appears poised to disrupt that narrative, bringing with it a slew of high-profile experience and innovative products.


Next-Generation
Cryptocurrency Exchange
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