The market structure for digital assets is unique. In addition to matching trades, exchanges act as depository institutions for trading collateral. Professional traders and institutions incur costs, operational risk and capital inefficiencies because collateral is fragmented across many exchanges.

A large professional trader wanting $10M in buying power across 10 different exchanges might be required to post up to $100M in aggregate collateral, wait days for fiat transfers to settle and incur risk and expense in stablecoin purchases or redemption just to evenly rebalance buying power after a busy day of trading. Settlement delays in rebalancing fiat currency means missed trading opportunities while capital is being moved around and out of the market.

Moreover, the custody banks behind many of these exchanges are located in jurisdictions with regulatory regimes that are likely unfamiliar to many traders who will likely have no idea how to go about conducting due diligence on a bank located in Estonia, Slovakia, Georgia, Cypress or even Malta.

NextPrime solves these issues by letting traders post a single pool of capital with a fully regulated, first-world custodian and access that buying power across any of the exchanges on our network.

Contact us to learn more about our solutions for traders of digital assets or to inquire about adding your exchange to our platform.

Jeff Bone: about the author

Jeff Bone previously built and ran the foreign exchange and fixed income desks at RGM Advisors, a global proprietary trading firm. As a serial entrepreneur his prior companies have been acquired by General Magic, IBM and CMGI. Jeff is an experienced investor who has been actively involved with cryptocurrencies since 2010; his notable seed stage investments include Coinbase.