Traditional financial firms moving into crypto derivatives cannot simply transplant their existing operating models, according to Acuiti’s report Navigating the Path to Crypto: A Guide for TradFi Firms. The study says firms need to rethink connectivity, custody, risk controls, and liquidity access around how crypto markets actually function.
The report draws on survey data and in-depth interviews with market participants. Its central message is clear: digital assets are moving closer to mainstream finance, but crypto market structure, trading hours, and technical architecture remain very different from the standardised setup familiar to traditional institutions. Firms are being pulled in by volatility and trading opportunity, but also by longer-term themes such as tokenisation and blockchain-based settlement.
Fragmented venues are forcing front-office redesign
One of the first obstacles is market fragmentation. Unlike equities or listed derivatives, where liquidity is often concentrated across a small number of venues using common protocols, crypto derivatives trading is dispersed across dozens of exchanges. Each one can come with its own API, data schema, and connectivity standard. Survey respondents identified the lack of cross-venue standardisation as the biggest connectivity problem.
That leaves institutions building and maintaining custom integrations for each exchange they want to trade on. Acuiti also notes that crypto trading depends on cloud-native, largely web-based technology that can be less predictable and more unstable than traditional market infrastructure. Technology strategy is shifting as a result. While half of surveyed firms historically built front-office systems internally, newer entrants are increasingly using specialist third-party vendors to cut development time and reduce operational risk. The report quotes one executive saying firms can lean on years of software development experience built specifically for crypto markets instead of building everything themselves.
Prime brokers and custody providers are moving into focus
Crypto’s pre-funded and 24/7 trading model has made capital efficiency and counterparty exposure more urgent issues. Acuiti says more than half of surveyed institutions now use a prime broker for crypto trading, and crypto-native prime brokers are currently preferred over traditional providers that have expanded into the sector.
The attraction is straightforward: more leverage, consolidated collateral, and lower counterparty exposure. Even so, the report points to a small provider pool and relatively high costs. Institutions do not see the prime broker as just a technology layer; they treat it as a key partner for dealing with volatility, margin requirements, and round-the-clock risk.
Custody has also changed shape. After high-profile exchange failures, institutions are increasingly adopting hybrid custody structures that combine self-custody, third-party custodians, and limited exchange custody. The report says stronger asset security and lower counterparty risk are the main advantages. Firms still face practical problems, though, especially selecting suitable providers and integrating custody arrangements with trading systems.
Liquidity remains uneven across crypto derivatives markets
Acuiti says access to deep and reliable liquidity across fragmented venues is still a defining issue. Total crypto derivatives volumes may be high, but liquidity is not evenly distributed, with activity concentrated in a small number of major assets. Many institutions are responding by relying more heavily on market makers to reduce slippage and source liquidity across venues more efficiently.
The report also describes a slow convergence between crypto-native and traditional market structures. New regulated onshore derivatives exchanges are emerging, combining 24/7 trading with higher regulatory standards and off-exchange collateral models. Demand from institutions for transparency, governance, and regulatory clarity has helped push that shift.
For the next phase, Acuiti points to the development of prime brokerage, credit intermediation, and tokenised finance. One interviewee quoted in the report said tokenised finance is unavoidable, while blockchain-based reporting and smart contracts may reshape post-trade processing and risk management. For traditional institutions, the challenge is not to replicate existing workflows, but to rebuild them for crypto markets.