What is Institutional Exchange and What are The Best of Them?

In the first years of Bitcoin’s emergence, it did not receive any institutional attention. Things started to change during the first great Bitcoin surge in 2021. That year, some well-known financial and technological companies stepped in, demonstrating their belief in crypto and inspiring other businesses to tap into the crypto sector. An example may be MicroStragety and Tesla – the world’s tech giants and the biggest Bitcoin investors in the world.

In this article, we will discuss what platforms are used for institutional crypto trading and list some of the best of them.

Institutional Cryptocurrency Platform: How Does It Differ from Retail Exchanges?

Institutional adoption of cryptocurrency stimulated the growth and development of trading platforms, able to transact large amounts and offer additional features to large market participants. 

An institutional crypto exchange acts as an intermediary between investors offering a reliable platform (software) where they can sell and buy digital assets. Let’s see how an institutional crypto trading platform differs from a retail one.

Characteristicsinstitutional crypto PlatformRetail Exchange
Access, liquidity, and volumesAllow for large-scale trades and volumes, as they are designed to serve hedge funds, financial companies, etc., that operate with large capitals. Offer a much higher liquidity level compared with retail ones. To register on such a platform, users should prove their capital and trading volumes.Have low entry barriers and allow anyone to register and trade. Designed for individual traders.
Execution speedRequire extremely low latency and high-speed execution to capitalize on market volatility.  Utilize advanced technologies and infrastructure to ensure quick order fulfillment.The requirements for transaction speed for retail platforms are generally not as stringent as those for institutional platforms.
FeaturesAn institutional exchange must offer tools for professional traders – algorithmic trading, risk management, access to direct markets, etc.Retail platforms provide convenient interfaces for individuals to trade comfortably.
Security and complianceUtilize robust security measures to safeguard institutional-grade capital Stringent compliance with regulations.May not face the same strict regulatory scrutiny, but also must comply with regulations and laws.
Customer supportInstitutional platforms offer personalized managers to support clients.Retail exchanges provide more general customer support, compared with institutional.
FeesInstitutional fees may vary depending on trading volume. Some may make fee agreements with companies, especially in market-making programs.Retail platforms charge standard fees, which are often lower than those of institutional exchanges.

Table: Comparison of institutional and retail crypto platforms.

The most popular and trusted exchanges for institutional crypto trading include Binance, Coinbase, WhiteBIT, and other well-known exchanges.

Wrap Up

The larger the company investing in crypto, the larger its capital, and the more demands it has on an investment platform. Such features as security, liquidity, and compliance have become the key requirements of institutional investors in crypto.