BridgePort

We at @BridgePortMQ launched BridgePort Analytics last month to focus on quality on execution. We used Bridget to provide @business with insights noted in the article While there are many narratives around the catalysts for the downturn, analyzing execution is like studying DNA evidence - it tells its own empirical based story

I had a great conversation with @JohnLothianNews, discussing a topic that's central to the future of institutional crypto: how off-exchange settlement can significantly address trading risks and most importantly, increase capital efficiency. Both of these issues are prevalent because of prefunding We explored the critical need for robust infrastructure that bridges the gap between traditional finance rigor and the unique demands of digital assets. For any institution looking to navigate the complexities of this evolving market, understanding how to mitigate counterparty risk and streamline workflows is paramount. You can see the full interview here: 🔗 johnlothiannews.com/bridgepo…

Appreciate the coverage of the partnership between @BridgePortMQ and @CryptoFinanceAG off-exchange settlement. BridgePort is "...a middleware company that aims to build open custody by connecting reputable custodians and execution venues, giving trading firms the choice of using any custodian and using any venue without artificial limit constraints".

It's always a pleasure to dive into the core challenges of crypto infrastructure, and I did that with @TABBGroup, on the Market Structure Wave podcast series. We discussed how the evolution of crypto infrastructure mirrors the journey of traditional asset classes in a lot of ways, and how understanding those historical precedents is key to building a resilient and scalable future. We also tackled the biggest misconceptions that institutional investors still have about the crypto space and what needs to be built to earn their trust and capital. Link below:

🧵 While some on CT saw this announcement from @moomoo , the most interesting point is the mention of CaaS (Crypto-as-a-Service) — here's why it's significant (1/9)

With Kraken's announcement of its own Prime Brokerage Offering I wanted to revisit Ripple's acquisition of Hidden Road to explain the sudden interest in offering prime services Ripple made the biggest bet on institutional crypto infrastructure we've seen this year. The $1.25 billion acquisition of Hidden Road marks the second largest deal in crypto history, but the real story isn't the price tag—it's what this acquisition enables. 🧵🔽

Institutional Crypto Needs Credit—Just Like Every Other Market Traditional finance doesn’t operate on pre-funded accounts. Every major asset class—equities, FX, fixed income, derivatives—runs on credit and leverage. 🔹 Equities → Prime brokers extend margin to hedge funds and asset managers. 🔹 FX → Trading firms execute massive currency swaps without pre-funding each leg. 🔹 Fixed Income → Bond markets rely on repo financing for liquidity and capital efficiency. These mechanisms exist because capital efficiency is critical. Institutions don’t park billions of dollars at execution venues just to trade—it would be an unacceptable use of capital. Yet, in institutional crypto: 🔸 Trading firms must lock up assets at exchanges before they can execute trades. 🔸 OTC participants extend unverified credit, exposing them to counterparty risk. 🔸 Custodians and exchanges operate in silos, further fragmenting liquidity. This doesn’t scale. And it’s a major barrier for traditional firms looking to enter crypto. The introduction of credit into institutional crypto in a scalable and measured way will be a game changer. With structured credit allocation and post-trade settlement, trading firms will be able to: ✅ Deploy capital efficiently – Instead of locking up funds at each exchange, firms can allocate dynamically across venues. ✅ Improve liquidity – A credit-based system reduces capital constraints, allowing for deeper liquidity pools and tighter spreads. ✅ Manage counterparty risk – Verified credit frameworks and collateralized lending ensure safe, institutional-grade trading. ✅ Enable true institutional adoption – Traditional firms won’t engage in crypto at scale without the same risk-mitigating mechanisms they rely on in tradFi. Leverage isn’t new to crypto - exchanges already provide it to trading firms. However, without proper guardrails, the way leverage is extended today introduces serious risks that could lead to major market disruptions: ⚠ Unverified credit issuance – Some firms get favorable margin terms based on trading history, but there’s no standardized way to verify creditworthiness. This can lead to excessive risk-taking and cascading liquidations. ⚠ Overcollateralization - in one coin to obtain leverage in another coin is rife with issues ⚠ Lack of cross-exchange margining – Capital fragmented across venues, forcing trading firms to overcapitalize each account, making the system inefficient and increasing operational risks. ⚠ Counterparty risk without protection – Firms must trust exchanges to settle properly. Without a credit framework or third-party verification, they are exposed if an exchange fails or mismanages risk (FTX is a prime example). Crypto markets need a credit layer, not just for efficiency, but for growth. Without it, trading firms will remain capital-inefficient, institutional adoption will stall, and liquidity will stay fragmented.