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The future of crypto prime brokerage: highlights from Finery Markets livestream session

June 8, 2023

In a recent livestream session hosted by Finery Markets, a panel of industry experts convened to explore the evolving landscape of crypto prime brokerage. The panel, featuring Leo Hmelnitsky, Head of Strategic Partnerships at Finery Markets, Peter Eliades, former Global Head of Distribution at Floating Point Group (FPG), Michael Rabkin, Global Head of Business Development at DV Chain, and Boris Sebosik, Head of OTC at Wincent, delved into the dynamics of the crypto market, the unique challenges we are facing now, and the role of technological innovation in shaping the future. Here are some key insights and takeaways from the session.

Centralized Crypto Exchanges: A Flawed Model

Leo Hmelnitsky kicked off the discussion by highlighting the parallels in the evolution of the traditional and digital asset market structure and the number of challenges we face with the current centralized crypto exchanges. He observed, "Centralized exchanges gave solid growth and wide adoption to crypto trading, but they do have issues. There's a conflict of interest. There's a pre-funding requirement just to name a few. And the pain points only got worse after the collapse of FTX. All of a sudden the industry realized that we need to price counterparty risk."

Highlighting the liquidity shift towards non-custodial OTC trading solutions, Hmelnitsky further shared how Finery Markets has designed an institutional multi-dealer non-custodial trading platform that provides the best execution for digital assets.

Introducing FM Liquidity Match

Hmelnitsky introduced FM Liquidity Match, a technology solution by Finery Markets. "The solution we provide, essentially, allows prime brokers and financial institutions to create a proprietary ECN with superior matching engine and firm liquidity which offers high-quality execution, tighter spreads, minimal market impact, and allows the most efficient use of capital for clients."

Echoing Hmelnitsky's sentiments, Peter Eliades of Floating Point Group (FPG) emphasized the pain points, that FM Liquidity Match helps to resolve. He stated, "We talk to clients and hear constant frustrations when they're trying to access unique liquidity that is efficient, actionable, and dependable. The whole Finery Markets platform solves this and gives us an out-of-the-box solution for trading". Eliades also praised the Finery Markets trading GUI for its intuitiveness and robustness.

Institutional Interest Is Picking Up

The institutional adoption of cryptocurrencies was a significant talking point throughout the discussion. Michael Rabkin from DV Chain stated, "We've seen a growing interest from institutions coming into crypto. This trend is likely to continue." Rabkin also noted the importance of advancements in areas such as scalability, security, and transaction speed for attracting more participants and increasing market efficiency.

Similarly, Boris Sebosik from Wincent noted the increasing institutional interest in the market, "We are seeing signs institutional interest is picking up, which will likely draw new interest into the markets into the PB space, which will increase competition."

The Next Step in the Evolution of Capital Markets

Sebosik emphasized the critical role of technology stacks in shaping the digital assets market. It is imperative to stay ahead of the game in this competitive industry. "The markets are always on the move, and that means we need technology that is solid and able to scale up when needed. If a prime brokerage wants to compete on a global level, then I would argue that they need to meet the same technical requirements. And I think that's where FM Liquidity Match comes in quite nicely because prime brokers can take advantage of what they’ve been building over the past six years and offer their clients a robust solution based on the liquidity from the established tech leaders."

The panelists agreed that innovations in cryptocurrency trading are key. Hmelnitsky noted, "We believe that this is the next step in the evolution of the capital markets as a whole."

To wrap up, the livestream session offered a unique perspective on the future of the crypto prime brokerage space. Despite the challenges, it's evident that with technology solutions like FM Liquidity Match, Finery Markets is well positioned to deliver unique value and experience to digital assets market participants.

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