Last night, the market trading enthusiasm was reactivated by the sudden news. After several major reasons, BTC rose by 2,000 points and rushed to 30,000. What is the background of this exchange? What impact will it have on the market? This article will analyze it in detail!
EDX Markets
Unlike typical cryptocurrency exchanges, EDX says its operations draw on traditional financial standards and will operate as a "non-custodial" exchange that will not directly handle customers' digital assets. Instead, EDX will provide a marketplace where businesses can execute trades between cryptocurrencies and fiat currencies.
The actual transfer of cryptocurrency and cash between parties to settle trades occurs outside the EDX platform. While EDX plans to launch a clearinghouse later this year to facilitate trade settlements, the exchange intends to use third-party banks and cryptocurrency custodians to hold customer assets. EDX's non-custodial approach is intended to alleviate concerns about security and potential misuse of customer funds and avoid conflicts of interest.
EDX will not serve individual investors directly, but instead expects retail brokers to distribute investors’ cryptocurrency buy and sell orders on its platform, similar to how the stock market operates.
In addition to receiving investments from several large traditional financial institutions such as Citadel Securities, Fidelity and Charles Schwab, EDX also received investments from Paradigm, Sequoia Capital and Virtu Financial. The exchange will also announce the completion of a second round of funding, with new investors including Miami International Holdings, affiliates of proprietary trading firm DV Trading, GTS, GSR and Hudson River Trading.
EDX will only provide trading in four cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) (none of these four cryptocurrencies have been identified as securities by the U.S. Securities and Exchange Commission). There is no news yet on whether other cryptocurrencies will be listed.
EDX Markets’ possible impact on the market
EDX’s non-custodial approach could have the following impacts on the cryptocurrency market:
Improved transaction security: EDX operates by drawing on traditional financial standards and using third-party banks and cryptocurrency custodians to hold customer assets, thereby alleviating concerns about security. This model may reduce the risk of customer funds being misused or hacked, thereby improving the security of transactions.
Promote institutional participation: EDX has obtained some major investors from large traditional financial institutions and the cryptocurrency industry. The participation of these institutions may attract more institutional investors to enter the cryptocurrency market, bringing more liquidity and stability to the market.
Increased market transparency: As a non-custodial exchange, EDX’s operating method may help increase market transparency. Since the actual asset transfer occurs outside the platform, the transaction process may be more transparent and traceable, reducing the possibility of information asymmetry.
Promoting compliance standards: EDX plans to launch a clearing house to facilitate transaction settlements and may work with regulators to ensure compliance with relevant regulations and compliance standards. This will help promote the standardization and compliance of the cryptocurrency market and improve the sustainability of the market.
Broaden the investor base: Although EDX does not directly serve individual investors, its model may attract retail brokers to join its platform and allocate individual investors' buy and sell orders to the exchange. This will broaden the investor base in the cryptocurrency market and increase market participation.
In general, EDX Markets, with its non-custodial trading model and strong partners, may have a positive impact on the cryptocurrency market, improve transaction security, market transparency, and promote market standardization and compliance. However, this also shows that the US government's attitude towards cryptocurrencies has changed, and more people are slowly accepting this market. However, judging from the currencies that can be traded at present, the US regulation of cryptocurrencies has not decreased. I wonder if it will be more perfect in the future. Today is the Dragon Boat Festival, everyone has a good time! (Did you go out to relax during the holiday?)