New players are reshaping crypto market structure, and that's bad news for exchanges

Quick Take

  • Traders usually engage directly with exchanges or OTC desks, but a new class of firms – agency brokers – are acting as middlemen between investors and the market
  • This could spell trouble for exchanges, as brokers routing orders to market makers take order flow that would otherwise go to exchanges
  • Other barriers for exchange: the cost and difficulty of trading in comparison to utilizing agency brokers.
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