An FX trading veteran on building an institutional crypto exchange and navigating Covid-19

Episode 20 of Season 2 of The Scoop was recorded remotely with The Block’s Frank Chaparro and LMAX Group CEO David Mercer.

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Institutional crypto exchange LMAX Digital closed out its second year by 10x-ing its trade volumes, trading $75 billion worth of crypto in the past 12 months, the firm revealed exclusively to The Block.

Since its launch two years ago, the firm has facilitated $85 billion in trades, according to a Tuesday press release. Last year's monthly high was $8.6 billion traded in June of 2019, and that month saw the firm's daily record high on June 27, when $1.25 billion was traded on the exchange. 

CEO of LMAX Group David Mercer said the firm has become the primary price discovery venue, having grown to command a sizable portion of the spot cryptocurrency market. LMAX Digital has seen 41.9% growth from Q4’19 to Q1’20. Its volume in Q4’19 was $14.0 billion while in Q1'20, it reached $19.8 billion.

Source: The Block Research, Cryptosheets, CryptoCompare

Still, the firm's market share relative to other exchanges has stagnated recently after briefly surpassing Coinbase in November 2019.

Source: The Block Research, Cryptosheets, CryptoCompare

Now, with two years of growth under its belt, the firm is looking to expand its reach. Mercer told The Block that the firm is looking to add its trade and market data to more leading market reference indices, as well as expand its product portfolio with the growth of the asset class. 

In a recently recorded episode of The Scoop, Mercer discussed the firm's recent growth and what it's been like to operate a digital asset exchange in the midst of the ongoing financial and health crisis. The Block's Frank Chaparro and Mercer also explore:

  • How the firm coped with rising volatility and maintained liquidity on its venue in the midst of whipsawing crypto markets
  • The differences between how traditional markets have held up during the COVID-19 crisis relative to crypto 
  • Why LMAX needs more asset managers, fund managers to get involved in crypto for it to go head to head with retail exchanges
  • What traditional markets can learn from crypto 
  • Why banks may not care about crypto yet, but their customers are asking questions 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Aislinn Keely joined The Block in the summer of 2019. She is a member of the outlet's policy team, holding down the legal beat. Before The Block, she lent her voice to the NPR affiliate WFUV, where she reported and anchored newscasts in addition to some podcast work. Aislinn is a proud Fordham Ram and editor-in-chief emerita of its newspaper. When she isn't writing or reporting, Aislinn is running and rock climbing.