When Brokerages Enter the Cryptocurrency Trading Arena

「Recently, my daily conference calls have been running until two in the morning.」

The one who said this is a veteran in the traditional brokerage industry, having spent over a decade navigating its ups and downs. As he uttered those words, his phone was placed upside down on the coffee table. His eyes were slightly bloodshot, but his tone remained nonchalant.

His office in Beijing is located in a quadrangle courtyard in Xicheng District. The two large doors are slightly chipped, with the afternoon light slanting into the courtyard, casting some dust particles dancing in the beams. Seated at an old wooden table, he was tackling issues related to regulation, business partnerships, and project timelines.

Starting his career in finance over a decade ago, he lived through the previous financial crisis, navigated the global markets, managed funds, ran products, led teams, and traveled across continents. However, in recent years, he has pivoted towards a direction that the entire traditional financial industry initially deemed "unreliable" — digital assets.

The traditional finance sector's attention to Web3 did not start in 2025. If one were to trace back, many would mention Robinhood.

This platform, known for "zero-commission stock trading," first introduced Bitcoin and Ethereum trading features as early as 2018. Initially launched as a supplementary product line, users could buy coins just like Tesla stocks, without the need for a wallet or an understanding of blockchain. This feature was not heavily promoted that year but became a tipping point a few years later.

In the last quarter of last year, cryptocurrency contributed to over 35% of Robinhood's total net revenue, with a surge of 455% in trading volume, driving a 733% year-on-year growth in trading revenue, reaching $358 million, making cryptocurrency Robinhood the largest revenue source of the quarter. In the first quarter of 2025, cryptocurrency contributed to over 27% of total revenue, with trading revenue doubling year-on-year to reach $252 million.

Robinhood Quarterly Cryptocurrency Trends, Source: IO.FUND

Driving this change was not technology but the clicks of thousands of users. Robinhood did not pitch a Web3 narrative but simply followed users' trading habits, only to realize that cryptocurrency trading was no longer a fringe business but had instead become the core growth engine of the company.

Subsequently, Robinhood gradually transitioned from a centralized brokerage to a digital asset trading platform.

With Robinhood as a precursor, traditional finance finally transitioned in 2025 from merely observing the crypto industry to collectively deciding to enter the space. They didn't come to experience Web3 or to invest in projects; rather, "traditional finance will take over the crypto industry within 10 years."

In this reshuffling where traditional brokerages are merging with the crypto-native, we are already in the midst of it.

In March 2025, Jassine Wealth Management Group, one of the world's largest retail brokerages with over $10 trillion in assets under management, announced that it would open Bitcoin spot trading services within a year.

In May 2025, Morgan Stanley, as one of Wall Street's most influential investment banks, announced plans to officially integrate BTC and ETH into its E*Trade trading platform, providing a direct trading channel for retail users.

In May 2025, JPMorgan Chase, the largest bank in the U.S. with a historically critical stance on crypto assets, announced that it would allow customers to purchase Bitcoin.

In July 2025, Standard Chartered, a long-standing British bank deeply rooted in the Asian, African, and Middle Eastern markets, announced that it would open Bitcoin and Ethereum spot trading services for institutional clients.

They are the behemoths that dominate the global financial system. These traditional financial institutions control global fund inflows and outflows, clearing networks, fiat payment systems, and hold assets worth hundreds of trillions of dollars, while in contrast, the current total market capitalization of the crypto market is only $4 trillion.

Mainstream Asset Market Cap Ranking, Image Source: Steemit Community

They are gradually establishing themselves in the crypto space based on traditional financial regulatory frameworks. When an institution has both regulatory trust, user traffic, and clearing capabilities, it possesses all the elements needed to build a crypto trading network.

In the traditional financial system, whoever holds the account opening authority controls fund flows, customer relationships, and even pricing power. For a long time, crypto trading platforms defined narratives by listing coins and controlled liquidity through deposits. However, now, after nearly a decade of centralized exchanges (CEXs) seizing the role of "asset gateways," this role is gradually being taken back by traditional finance.

"Those crypto trading platforms should start feeling anxious."

His tone remained restrained, with no hint of schadenfreude. The source of anxiety may not just be due to the entry of a particular institution or the implementation of a specific policy but a self-awareness within the industry that crypto trading platforms may no longer be the only ones at the financial table with the power to deal the cards.

Staying at the Table

A key figure within a cryptocurrency exchange recently told us that he often replies to messages at 5 a.m. These days, he discusses partnerships during the day, monitors progress at night, and delves into user community feedback in the wee hours of the morning, barely getting any sleep.

"We can only survive in anxiety."

The anxiety he talks about stems from the competition between platforms, where every day is a battle to acquire users, products, and traffic in order to survive.

The root of this fierce competition lies in the fact that there is little room for growth in the industry and external pressures are squeezing them too hard.

Traditional finance is slowly eroding the core capabilities that cryptocurrency exchanges rely on for survival—from fiat onramps to asset custody, from user onboarding to spot matching. Armed with regulatory licenses and millions of users, they are approaching aggressively and seemingly have no intention of coexisting with native cryptocurrency platforms.

Almost all cryptocurrency exchanges immediately launched tokenized stock products. Buying Apple stocks with USDT, leveraging NVIDIA, trading Tesla through on-chain contracts. These traditional asset on-chain solutions have successively gone live on multiple platforms, becoming an industry-wide trend.

Bybit was the first to take the plunge. They completed the development and launch of their U.S. stock token product in just two months, moving quickly from internal approval to engaging with the XStocks team and eventually launching.

For Bybit, the core advantages of centralized exchanges still hold. The real users and strong liquidity with deep order books accumulated over the years are resources that external brokers cannot easily replicate.

The launch of U.S. stock tokens was driven by a clear demand gap they observed, such as the need for trading during off-market hours or users facing geographical and compliance restrictions to enter the traditional stock market. Crypto's 24/7 nature has opened up new liquidity venues for traditional assets.

Of course, this does not mean it is a guaranteed victory. Emily, the spot lead at Bybit, admits that U.S. stock tokens are still in the early stages, with participation and interest far below that of high-traffic new token listings.

However, she remains optimistic about this direction, as it signifies Crypto expanding its playbook into the TradFi world. DeFi, synthetic assets, on-chain collateral—these new derivative scenarios for traditional assets on the blockchain may hold the true value along this path.

However, these features seem more like actively exploring new markets, but to many, they appear more as a form of passive defense.

When exchanges no longer have the dominant power of "asset onboarding," they begin to try to make themselves look like they are still connected to the world. Thus, coin pairs became the most common defensive move at this stage.

In fact, coin pairing is not a new concept.

If we turn back time to 2020, FTX had already proposed the coin pairing model back then. At that time, they launched trading pairs such as TSLA/BTC, AAPL/USDT, which were seen as attempts to challenge traditional financial pricing logic.

That era was when the crypto industry still had an offensive mindset. What FTX wanted to do was to use crypto finance to rewrite the traditional way of trading in finance, to use crypto finance to price Nasdaq.

Perhaps at that time, he already saw that the biggest competitor of cryptocurrency trading platforms in the future would be brokerages, so he took the initiative. Looking back now, this model has been picked up again by the industry but has changed its flavor. After FTX fell, coin pairing became a tourniquet to stop the bleeding, no longer a battering ram.

Data also confirms this.

After the coin pairing model went live, it did receive a wave of community attention initially, but the activity quickly dropped, and the attempts by various platforms failed to make much of a splash.

On the other hand, as a comparison, during the same period, the meme coin market on Solana took a completely different path. Musk tweets once, and the market cap of related meme coins can quickly reach billions, with daily trading volumes in the tens of millions of dollars, much higher than the weekly trading volume of many coin pairs.

Top: XStocks trading volume, Image Source: Dune; Bottom: meme coin Ani trading volume, Image Source: gmgn

New features, but no new users.

At this stage, what features CEX introduces is no longer important. What is important is why they are introducing these features and whether these features can bring back the role they are losing.

This round of coin pairing frenzy is not because the industry has progressed, but because no one dares to do nothing.

Kant said, "Freedom is not doing what you want to do, but not doing what you don't want to do."

Compliance, Just an Illusion

During this time period, nearly all cryptocurrency exchanges have been talking about compliance. Each one is striving to apply for licenses, adjust their business structures, bring in executives with traditional financial backgrounds, trying to prove that they have emerged from the grassroots era and become more like a financial institution that can be accepted by regulators.

This is an industry consensus, as well as a collective anxiety.

However, in the eyes of traditional financial professionals, this understanding of compliance is still too shallow.

"Many exchanges go to small countries to get a license to self-proclaim compliance, but a license from a small country does not really count as a license, it cannot even be put on the table." he said, his tone not sharp, more like stating an industry common sense.

What he means by "putting it on the table" is not whether you have a business license, but whether you can access the real financial system—whether you can open an account at a mainstream bank, use the clearing network, be trusted by regulatory agencies, and truly engage in business cooperation with them.

Behind this is a reality, where in the eyes of traditional finance, the crypto world has never been truly regarded as an equal.

The traditional financial system is built on a chain of responsibility and a closed loop of trust, emphasizing a transparent customer structure, risk control, auditability, and the explainability of fund flows. Crypto platforms, on the other hand, have mostly grown in institutional loopholes, initially sustaining high profits and high growth in grey areas, but rarely having the ability to build these compliance foundations.

Actually, these issues are well understood by insiders. But no one cared before, because no one was contesting this territory. Now that traditional financial institutions are entering the scene, they operate by their own rules, and those "industry norms" in the crypto industry have suddenly become liabilities.

Some platforms have indeed made adjustments, introducing compliance audits, setting up overseas trust structures, conducting business separations, striving to make themselves look more formal.

However, regulatory agencies in many countries are simply not buying it. They may superficially go along with your process, but deep down, they never intended to regard you as a formal part of the financial system. No matter how similar you may seem, you are only "seeming," not a guarantee that they will actually keep you.

However, not all exchanges are just going through the motions. Bybit is one of the few platforms that has truly broken through the regulatory shell. This year, they became one of the first centralized exchanges to obtain the European MiCA license and established their European headquarters in Vienna, Austria.

Bybit does not deny that this process has been difficult, nor do they shy away from acknowledging the regulatory skepticism toward the industry. But as Emily mentioned, regulation is no longer the same as the regulatory landscape that didn't understand crypto five years ago. Now, regulatory agencies are beginning to truly grasp the business logic and technical structure of this industry. From technology, patterns to market promotion, their understanding is deepening, and the foundation of cooperation is becoming more solid.

In addition, Xie Jiayin, the head of Bitget's Chinese team, told us that Bitget has obtained virtual asset licenses in multiple countries and has established local compliance architectures based on regulatory requirements in each region. He revealed that the team is also actively working on obtaining the MiCA license, hoping to establish a more stable business channel in the European market through this and lay the foundation for cross-border operations under future unified regulatory frameworks.

However, even so, such cases are still the minority. For most platforms, they not only lack licenses, networks, and endorsements within the traditional financial system, but are also losing the high-growth dividend brought by the previous institutional vacuum. Wanting to transform through compliance, they find the threshold too high; wanting to return to being crypto-native, they find another group of competitors eyeing them eagerly.

So everyone can only continue to move closer to regulation, continue to discuss compliance, apply for licenses, and go through processes. Many times, behind these actions is not a strategic choice, but a sense of anxiety being driven forward.

The Intermission of the Game

In the community at five in the morning, Xie Jiayin is still answering users' questions one by one. Some ask how to trade on the platform, some ask about the platform's recent compliance progress, and some ask about the PUMP token sale and how it will be handled. He said he and his colleagues often stay up all night, with an all-nighter being nothing special.

In the hot afternoon of Beijing, in a courtyard house, a senior executive from a Hong Kong brokerage is having tea and negotiating cooperation with several senior executives from listed companies. Behind a carved wooden door in the reception room is a courtyard paved with blue bricks, with chirping insects under the shade of trees.

Looking further afield, in Vienna, Austria, Bybit has just held a ribbon-cutting ceremony for its new European headquarters and officially started office operations. This is their European outpost established after obtaining the MiCA license. They have become one of the first centralized exchanges to complete the river-crossing action, while understanding that the vast majority of their peers are still feeling their way across the river.

They are in different places, different moods, and different rhythms, but their words echo subtly: all are mentioning "changes are happening too quickly," all are talking about "taking it slow," all are contemplating how the industry should proceed.

And the premise of this progression is no longer the same as it was a few years ago.

Cryptocurrency exchanges may no longer play the most central role in this world, nor be the starting point for all traffic and narratives. They are standing on the edge of a new order, slowly being squeezed out of the core by an invisible set of rules.

More complex systems, larger capital, are gradually replacing the native narratives and structures.

Cryptocurrency exchanges are still here, new product features are being launched as usual, announcements are being made one after another. Their way of expression is changing, their pace of speaking out is changing, the context they want to integrate into is changing, everything is changing.

Some changes are actively chosen, some are passively accepted, but most of the time, they are just trying to maintain a presence without being obsolete.

However, not everyone is pessimistic. Xi and Emily both believe that Crypto's impact on traditional finance is greater than the latter's squeeze on CEX. They are optimistic about the trend of traditional financial institutions entering the field because every cycle of industry evolution requires new players, new participants. Centralized exchanges have developed to this day, constantly expanding their institutional client base, starting to do wealth management, asset allocation, and so on. The convergence and integration of both sides' businesses, "the two financial worlds echo each other, it is a romantic moment."

But at the same time, everyone is also aware that this advantage itself does not exempt from anxiety.

Many questions will not have clear answers. For example, will regulation really allow these cryptocurrency exchanges? Will traditional finance truly be willing to coexist rather than replace?

Or whether, before the next industry trend arrives, they will have another chance to define themselves.

No one dares to be too full of themselves about these questions. Everyone is tackling their part of the work, having meetings, improving products, obtaining licenses, seeking feedback, maintaining the status quo, while waiting for the opportunity to actively strive again.

They are waiting for the wave of industry reshuffling.

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