In April 2025, Ripple dropped $1.25 billion to purchase Hidden Highway, immediately turning into the primary crypto firm to personal a worldwide prime dealer. That is the form of deal that indicators an enormous shift in institutional digital asset infrastructure. It isn’t simply evolving, however is as a substitute being rebuilt from the bottom up.
One purpose for that is the fragmentation drawback. “Liquidity is scattered throughout dozens of exchanges with out a single dominant platform throughout all buying and selling pairs or devices,” says Sameer Shalaby, Co-Founder & CEO of VersiFi.
“Liquidity is scattered throughout dozens of exchanges with out a single dominant platform throughout all buying and selling pairs or devices.”
Sameer Shalaby
In the meantime Frank van Zegveld, Head of EMEA Gross sales at Talos, places the dimensions in perspective: Talos alone connects to over 70 sources of liquidity. “Not like conventional markets, the place buying and selling is focused on a couple of dominant venues, the digital asset ecosystem is extremely fragmented,” he explains.
This fragmentation exists because the crypto and digital belongings market transitions from an adolescent to a younger grownup state (in response to Coalition Greenwich’s March 2025 report), and as 65% of EU-based crypto companies have achieved MiCA compliance. Establishments can seemingly now not look forward to market infrastructure to mature. So what lies in retailer for them?
The technical labyrinth
2025 is bringing digital asset infrastructure breakthroughs. Bitnomial launched the fourth US clearinghouse for crypto derivatives in January, providing one thing unprecedented: accepting digital asset collateral to margin futures and choices buying and selling. For the primary time, establishments can use their Bitcoin and Ethereum holdings as margin, eliminating the necessity to convert to money and dramatically bettering capital effectivity.
The infrastructure arms race is accelerating. Conventional monetary expertise corporations are coming into the area with enterprise-grade options designed to summary away the complexity. New protocols are rising that promise standardized connectivity, whereas regulatory readability is pushing exchanges towards extra constant operational practices.
Regardless of this rush, the market is just not with out its technical complexities, which runs deeper than simply having many venues. “Not like conventional markets, the place information communications are standardized by the FIX protocol, no such standardization exists in digital asset markets,” van Zegveld explains.
“Not like conventional markets, the place buying and selling is focused on a couple of dominant venues, the digital asset ecosystem is extremely fragmented.”
Frank van Zegveld
This implies establishments should construct customized API connections for every change, which “shortly turns into a drain on engineering assets to ascertain and keep.”
The engineering burden is staggering. Whereas conventional finance depends on decades-old protocols that enable seamless connectivity throughout markets, digital asset buying and selling requires bespoke integration work for each venue.
Every venture includes painstaking work verifying API endpoints, decoding information payloads, constructing authentication paths, and dealing with distinctive operational flows (similar to pre-funding accounts or non-DvP settlement fashions). What must be an easy, plug-and-play connection transforms right into a months-long growth cycle for every change.
Tony Acuña-Rohter, Chief Government Officer at EDX Markets, places it bluntly: “It isn’t operationally, technologically, or financially possible to hook up with the handfuls of venues or market makers straight.”
The problem is managing the operational complexity that comes with this integration. Establishments should navigate various price buildings, completely different danger administration protocols, and inconsistent settlement mechanisms throughout platforms.
Shalaby highlights one other layer of the issue: “Accessing real-time market information throughout a number of venues can introduce latency and restrict visibility into true market depth.” When milliseconds matter, the technical overhead of aggregating information from disparate sources can imply the distinction between worthwhile trades and missed alternatives.
Every venue requires separate danger administration, as “establishments have to onboard and handle counterparty publicity on every change individually, rising danger and operational complications.”
The operational burden extends past expertise. Authorized groups should negotiate dozens of separate agreements. Compliance departments should monitor completely different jurisdictions and regulatory necessities. Treasury groups should handle collateral throughout a number of venues, typically requiring pre-funding that ties up capital inefficiently.
“Our focus at Talos has been on simplifying the complexity of a extremely fragmented ecosystem,” van Zegveld says. “We’re constructing the connective tissue that brings collectively disparate venues, workflows, and liquidity sources right into a one-stop resolution that surpasses conventional platforms, by leveraging the distinctive traits of the digital asset class.”
As resolution suppliers navigate technical challenges, they’re additionally setting the stage for an even bigger transformation: the rise of prime brokerage providers that may resolve these connectivity and operational challenges by way of a single relationship.
Prime brokerage because the bridge resolution
“At present, not one of the main TradFi banks or prime brokers help crypto,” van Zegveld observes. “There are rising prime brokerage options, with suppliers providing incomplete providers.”
This vacuum has attracted new gamers who see prime brokerage as the answer to institutional crypto’s fragmentation drawback. “Prime brokers have emerged as the final word resolution in institutional digital asset buying and selling, performing as each aggregators and danger managers to assist mitigate the liquidity challenges posed by a fragmented market,” Shalaby explains.
Market developments bear out Shalaby’s observations. Kraken launched Kraken Prime in June 2025, providing institutional shoppers entry to liquidity representing over 90% of the digital asset market throughout greater than 20 world venues.
The platform helps asset-backed lending and seamless integration with each on- and off-platform liquidity by way of sensible order routing.
In the meantime, Hidden Highway has scaled to spectacular institutional attain, clearing $3 trillion yearly throughout markets with greater than 300 prime institutional clients. In Could, the agency formally entered the US market with OTC digital asset swaps, enabling institutional shoppers to execute cash-settled swaps throughout a variety of digital belongings.
The worth proposition is compelling. Prime brokers “give shoppers entry to a large community of exchanges and liquidity suppliers by way of a single account, which eliminates the necessity to keep separate operational and authorized relationships with every counterparty,” Shalaby notes.
In addition they “prolong one credit score line to the shopper whereas managing collateral and margin throughout exchanges to allow cross-venue margining and capital effectivity.”
However the actual breakthrough is available in execution capabilities. Shalaby notes that Prime brokers provide algorithmic buying and selling capabilities with sensible order routing that may supply liquidity throughout venues to optimize execution. “That is vital for establishments searching for tighter spreads throughout execution venues,” he says.
The infrastructure van Zegveld described as incomplete is quickly altering. “Many prime brokers associate with custodial providers, making certain safe and segregated asset storage whereas supporting real-time buying and selling,” Shalaby says. “They provide environment friendly onboarding, reporting, reconciliation, and danger administration to allow establishments to scale their buying and selling actions with out scaling complexity. While Kebbie Sebastian, CEO & Founder, Merge says that, “With a whole lot of billions of {dollars} in institutional capital anticipated to enter digital belongings this 12 months, these digital-native prime brokers aren’t simply service suppliers – they’re the infrastructure layer that may energy a multi-trillion greenback market. The winners gained’t be single prime brokers however orchestrators who can dynamically route throughout this specialised ecosystem.”
This institutionalization of prime brokerage providers units the stage for the subsequent vital growth: regulatory frameworks that may present the oversight and legitimacy these rising institutional relationships demand.
The regulated venue benefit
As with all issues institutional finance, regulatory standing has turn into the brand new aggressive moat. “Regulated venues are vital to attracting and retaining long-term participation from institutional traders,” Acuña-Rohter explains.
“Establishments function below a strong set of necessities and oversight, that are embedded of their danger administration, vendor administration and safety applications.”
“It isn’t operationally, technologically, or financially possible to hook up with the handfuls of venues or market makers straight.”
Tony Acuña-Rohter
The regulatory panorama is shifting in establishments’ favour. Van Zegveld factors to complete frameworks like MiCA within the EU and VARA in Dubai as catalysts for change. “These regimes are setting clearer requirements round custody, buying and selling, reporting, and governance and in doing so, are paving the best way for broader institutional participation,” he notes.
The market is responding predictably. “This regulatory momentum is having the impact of consolidating quantity towards venues that meet regulatory expectations and institutional-grade requirements,” van Zegveld observes.
“It’s incentivising exchanges and intermediaries to undertake greatest practices in areas like greatest execution, market surveillance, transaction reporting and counterparty controls.”
EDX Markets exemplifies this regulatory-first strategy, Acuña-Rohter says. Regardless of working in an surroundings the place “spot digital asset buying and selling and clearing aren’t presently ruled by federal rules,” Acuña-Rohter says his venue “was designed from the bottom up with these priorities in thoughts.”
The platform performs KYC and buyer due diligence for all contributors and has partnered with industry-leading compliance suppliers for commerce surveillance and transaction monitoring.
Acuña-Rohter’s guess is that regulatory preparation pays off. “As regulatory readability continues to emerge, significantly with current motion within the US, venues like EDX which might be aligned with institutional necessities will play a central function in attracting institutional participation,” he predicts.
“EDX shall be prepared for regulation as a result of we have been purpose-built with conventional monetary market construction and regulation in thoughts.”
The regulatory basis extends past compliance and into operational integrity. EDX has carried out buying and selling and monitoring safeguards, together with commerce observe surveillance, transaction monitoring, fats finger limits, value banding, and messaging throttles.
“The mixture of those controls protects the market in opposition to runaway algorithms, market manipulation, and operational points related to execution,” Acuña-Rohter explains.
This regulatory legitimacy creates a virtuous cycle,Van Zegveld notes. “It’s having the impact of consolidating quantity towards venues that meet regulatory expectations and institutional-grade requirements,” he says. “It’s incentivising exchanges and intermediaries to undertake greatest practices in areas like greatest execution, market surveillance, transaction reporting, and counterparty controls.”
He additionally notes that it helps institutional traders meet inner mandates for compliance, auditability, and fiduciary duty.
Hybrid DEX-CEX methods
Whereas regulated venues present the compliance framework establishments want, they’re additionally opening the door to hybrid buying and selling approaches that mix conventional centralized exchanges with decentralized alternate options.
Decentralized exchanges provide institutional benefits that centralized venues can’t match. “Their peer-to-peer buying and selling mechanisms remove the necessity for intermediaries, and contributors retain custody of their belongings, which reduces the counterparty danger related to centralized change failures or hacks,” van Zegveld explains.
“And since transactions are on-chain, they’re auditable in a approach that centralized change transactions aren’t, they usually settle virtually instantly which interprets into capital efficiencies.” However establishments can’t merely plug into DEXs with their current infrastructure. “Establishments can’t leverage these advantages at scale with out the precise execution infrastructure,” van Zegveld warns. They want “an institutional-grade custody resolution, similar to an MPC pockets, that allows entry controls with out compromising the self-custody required to work together with a DEX.”
“These digital-native prime brokers aren’t simply service suppliers – they’re the infrastructure layer that may energy a multi-trillion greenback market.”
Kebbie Sebastian
The true alternative lies in hybrid approaches. Van Zegveld anticipates that “many establishments will undertake a hybrid mannequin, whereby they commerce in each CEXs and DEXs concurrently.” This requires “a platform that aggregates liquidity from each into an artificial order ebook to facilitate value discovery, using superior algorithms or order sorts, and sensible order routing.”
2025 is delivering on this hybrid imaginative and prescient. The tokenization increase has created new markets value exploring. Actual-world asset tokenization has exploded 380% in three years to achieve $24 billion, with Commonplace Chartered projecting progress to $30 trillion by 2034. These tokenized belongings typically commerce on DEXs, giving establishments new causes to develop hybrid execution capabilities.
Specialised DEX growth is accelerating. Chatting with Cointelegraph, Michael Egorov, founding father of Curve Finance, predicted progress in “special-purpose decentralized exchanges” that resolve particular institutional issues.
“Exchanges between stablecoins of various denominations just like the Euro, US greenback, and others aren’t but correctly solved,” Egorov famous, highlighting FX as a key use case.
Compliance stays the vital enabler. Van Zegveld emphasizes that “compliance applied sciences that help on-chain KYT, whitelisting, and real-time danger scoring are more and more required earlier than establishments can get comfy interacting with DEXs.”
The strategic benefit is obvious. “The flexibility to mix CEX and DEX execution whereas managing danger and compliance is a aggressive benefit in a multi-venue market, permitting establishments to faucet right into a broader spectrum of liquidity alternatives,” van Zegveld concludes.
This hybrid infrastructure units the stage for a broader transformation: the evolution of conventional finance towards blockchain-native operations.
The infrastructure endgame
The infrastructure complexity that has plagued institutional crypto adoption is lastly being resolved. “Institutionally-focused options proceed to mature and turn into obtainable available in the market,” Acuña-Rohter observes. “A lot has modified over the previous decade, the place establishments now not need to construct every part in-house from the bottom up.”
What as soon as required customized growth for fundamental capabilities like custody, connectivity, and settlement workflows is turning into plug-and-play. The institutional adoption timeline displays this infrastructure maturation.
EY analysis exhibits establishments planning to scale digital asset investments over the subsequent two to a few years, with 50% expressing curiosity in investing in tokenized belongings. The hesitation displays the necessity to guarantee strong operational foundations.
Van Zegveld sees this second as the start of a a lot bigger transformation. “Our imaginative and prescient extends past crypto: we imagine that over time, all belongings will transfer onto digital rails, and the way forward for capital markets shall be powered by this new infrastructure.”
The infrastructure wars of the previous few years are creating the muse for this transition. Fragmentation compelled innovation in prime brokerage, regulatory frameworks, and hybrid execution platforms.
What started as an issue—dozens of disconnected venues with incompatible methods—is turning into a aggressive benefit as unified options emerge that may navigate complexity whereas delivering institutional-grade reliability.
The query is now not whether or not digital asset infrastructure can meet institutional calls for, however how shortly establishments can adapt to the alternatives this infrastructure creates.