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

The Block • May 19, 2020, 4:00AM EDT

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

About Authors

Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to akeely@theblock.co or follow her on Twitter for updates @AislinnKeely.

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].