Opinion: The Future of Institutional Adoption in Crypto

Crypto markets are undergoing a profound shift as institutional players pour in at unprecedented levels. What was once the domain of retail traders and crypto-native firms is now attracting global banks, hedge funds, and fintech giants. Institutional trading volumes have exploded; jumping 141% year-over-year in Q1 2025 alone, and this influx is reshaping liquidity and market making across centralized exchanges worldwide. From Wall Street to emerging markets in Southeast Asia, Latin America, Africa and the Middle East, institutions are increasingly making markets in crypto. In this post, we (Gravity Team) explore the global trends driving this institutional wave, spotlight key developments in emerging regions and share our perspective on how these trends are evolving and the role we’re playing in this seismic shift.

A Global Wave of Institutional Adoption

The past year has seen a surge of institutional interest in centralized crypto markets. Major financial institutions and professional trading firms are entering the crypto arena in force, bringing deep liquidity and a new level of credibility. Several catalysts have aligned to accelerate this trend:

• Regulatory Clarity & Products: Regulatory developments have lowered barriers. For example, the anticipated approval of U.S. spot Bitcoin ETFs in late 2024 signaled a turning point for mainstream acceptance. In Europe, the EU’s MiCA legislation began rolling out, creating a clear framework for digital asset markets. These moves gave traditional institutions the green light to get involved. Bitcoin briefly surged to new all-time highs (above $109,000 in early 2025) on optimism around these pro-crypto policies and products.

• Trading Volume & Liquidity Boom: With more institutional participants, crypto market liquidity has deepened. Institutional spot trading through OTC desks and exchanges has soared, with one platform reporting a 141% YoY increase in Q1 2025 as noted above. Notably, the most significant growth has been in crypto-to-stablecoin trades, which jumped fivefold compared to the prior year. Stablecoins are increasingly the quote currency of choice for institutions, providing a familiar fiat proxy for moving in and out of positions amidst 24/7 crypto volatility.

• Wall Street Joins In: Several Wall Street titans are now directly or indirectly making markets in crypto. For instance, Citadel Securities; one of the world’s largest market makers, has been setting up crypto liquidity teams to provide two-sided quotes on major exchanges (initially outside the U.S.), positioning to trade digital assets “as they do in any other asset class” once regulations permit. Likewise, a consortium of financial firms including Citadel, Fidelity and Charles Schwab launched EDX Markets, a purely institutional crypto exchange, in mid-2023 to cater to this growing demand. The involvement of such players underscores that crypto market making is no longer fringe, it’s becoming part of the global trading infrastructure.

• Traditional Exchanges Embrace Crypto: Established exchange operators and brokerages have also expanded into crypto. CME Group and CBOE now offer an array of crypto derivatives and spot market venues, while Nasdaq and Intercontinental Exchange (NYSE’s parent) have invested in crypto custody and trading initiatives. This convergence means that institutions can engage in crypto through the same kinds of platforms and market makers they use for equities or FX.

In short, the global trend is clear: institutional adoption of crypto market making is shifting the industry from a predominantly retail, fragmented market to one with professional liquidity provision, tighter spreads and higher volumes. Nowhere is this transformation more exciting than in emerging markets.

Emerging Markets: The New Crypto Frontier

While North America and Europe often dominate headlines, emerging markets are fast becoming the growth engine for institutional crypto adoption. Regions like Southeast Asia, Latin America, the Middle East and Africa are witnessing a leapfrog effect, as both local institutions and global firms focus on these markets. Below, we highlight trends and examples from each region:

Southeast Asia: Licensed Hubs and Banking Giants

Southeast Asia has embraced crypto market making with a pragmatic, innovation-friendly approach. Singapore, in particular, has positioned itself as an institutional crypto hub. DBS Bank (Singapore’s largest bank) operates a regulated digital asset exchange (DDEx) for professional investors, and its volumes have exploded. In the first five months of 2024, the trading value on DBS’s exchange nearly tripled compared to a year earlier, with a 36% increase in active clients. This reflects how strongly regional family offices, funds and corporates are adopting crypto when given a trusted platform. By late 2024, DBS even expanded into offering Bitcoin options and structured notes for its clients, blurring the line between traditional banking and crypto services.

Singapore’s success is inspiring others in the region. Indonesia launched a national crypto exchange in July 2023 to centralize and legitimize digital asset trading under government oversight. In Thailand and Malaysia, major banks have made strategic investments in crypto exchanges and fintechs, eyeing the trading revenues of a young, tech-savvy population. Meanwhile, Hong Kong’s new licensing regime has reopened that market for institutional-focused exchanges, prompting an influx of applications from global trading firms. Southeast Asia’s blend of supportive regulation and demand for digital assets means institutional market makers find fertile ground here. Gravity Team has been active across Asia, partnering with exchanges to ensure these markets have the liquidity depth expected by larger players.

Latin America: Banks and Fintechs Bridging Crypto

Latin America is another hotspot where real-world need meets institutional momentum. High inflation and volatile local currencies have driven both retail and institutions toward crypto for years, and now the region’s financial giants are stepping in formally. Brazil’s BTG Pactual, the largest investment bank in Latin America, launched its own crypto trading platform Mynt in 2023 and followed up by issuing a dollar-backed stablecoin in 2024 (BTG Dol) for seamless client settlement. This bold move by a traditional bank, offering crypto trading and even creating digital assets exemplifies the trend of LatAm institutions not just adopting crypto, but actively building crypto market infrastructure.

Regional crypto exchanges like Mercado Bitcoin and Bitso have also reported rising volumes of institutional clients, from hedge funds to remittance providers. In markets such as Argentina and Colombia, local brokerages are partnering with crypto liquidity providers to offer trading in Bitcoin and USDC as a hedge against currency instability. The result is a rapidly maturing market making environment. Order books for major crypto pairs in LatAm are now tighter and deeper, as professional market makers (including global firms and desks within banks) provide liquidity to meet the growing demand. This institutional involvement is especially important in LatAm’s context, where reliable liquidity can help stabilize prices during periods of macroeconomic turbulence.

Africa: High Adoption and Institutional Beginnings

Africa’s crypto story has been largely retail-driven to date, but that is changing as institutions begin to participate. Nigeria, for example, ranked #2 worldwide in Chainalysis’s 2024 crypto adoption index, underscoring massive grassroots usage. This widespread adoption is now paving the way for more institutional-grade services. South Africa recently implemented regulations classifying crypto assets as financial products, bringing exchanges and brokers under an established regulatory regime. With this clarity, South African banks and asset managers have started exploring crypto trading services for clients, and the Johannesburg Stock Exchange is evaluating crypto-linked products. As one analysis noted, South Africa’s fully regulated environment offers new opportunities for growth, with local banks working on stronger blockchain infrastructure to serve customers’ crypto needs.

Pan-African crypto platforms (like Luno and Yellow Card) have also expanded, providing liquidity across countries and connecting to global market makers. The presence of major crypto exchanges in Nigeria, Kenya, and South Africa means that order books are increasingly supported by professional liquidity providers rather than just peer-to-peer traders. While institutional adoption in Africa is still in its early stages, the combination of high retail volume and improving regulation makes it ripe for an institutional breakout. Gravity Team has seen growing interest from African fintech firms and funds seeking liquidity partnerships, and we expect Africa to be a region of significant crypto volume growth with institutional market making support in the coming years.

Gravity Team’s Perspective and Role in this Shift

As a global crypto market maker active on 30+ exchanges, Gravity Team has a front-row seat to these changes. We’ve been trading since 2017 and currently facilitate roughly 1% of global spot crypto volume, so the rise of institutional participation is something we both witness and contribute to daily. From our vantage point, a few insights stand out:

• Convergence of TradFi and Crypto: The line between traditional finance and crypto-native markets is blurring. We frequently find ourselves working with counterparties like banks, hedge funds and OTC desks that, a couple of years ago, would not have touched crypto. This convergence means adopting best practices from both worlds e.g., applying the risk management rigor of traditional finance while retaining the agility of crypto. Gravity Team plays a bridging role here, helping tradfi institutions understand the crypto market microstructure (which is very different from FX or equities) and providing them with the deep liquidity they require to operate comfortably.

• Emerging Markets Focus: We see emerging markets as critical to the next phase of crypto growth. That’s why we have actively expanded our liquidity services to exchanges in Southeast Asia and Latin America. By tailoring our market making to local market conditions; such as high-volatility scenarios in LATAM, we ensure these markets remain attractive to big players. In doing so, we’re helping bring the same level of liquidity found on major U.S. exchanges to trading venues in emerging economies.

• Impact on Market Quality: The influx of institutional market makers is overwhelmingly positive for market quality on centralized exchanges. Bid-ask spreads on top crypto pairs have tightened significantly over the past year, even during periods of volatility, thanks to greater competition and liquidity depth. We’ve observed that during volatile events, markets that once saw order books “vanish” now continue trading in an orderly fashion, a direct result of having a more robust market-making presence. Gravity Team, like others in our field, has invested in algorithmic strategies that dynamically adjust to these volatility spikes, ensuring continuous quotes. This stability is crucial for building investor confidence and is a key factor in encouraging even more institutions to participate.

Looking ahead, Gravity Team believes the trend of institutional adoption in crypto market making will only accelerate. With every regulatory advancement or successful case study (be it a bank-run crypto platform or a hedge fund earning strong returns in digital assets), the comfort level rises for the next wave of entrants. We anticipate a future where the term “crypto market maker” includes household-name financial institutions operating alongside crypto-native firms in a globally integrated liquidity network.

In conclusion, the future of institutional adoption in crypto market making is bright and fast-evolving. Global banks, trading firms and funds are no longer sitting on the sidelines, they are actively providing liquidity and shaping market structure in partnership with established crypto players. Emerging markets will play a pivotal role by bringing in new users and innovative use cases, all underpinned by professional market making to ensure efficient trading. From Gravity Team’s perspective, this fusion of traditional and crypto expertise is creating the healthiest, most mature version of the crypto market we’ve seen yet. We’re excited to continue supporting and driving this shift, leveraging our experience to make crypto markets more accessible, liquid, and stable for participants around the world.

Further Readings

• EY 2025 Institutional Investor Digital Assets Survey: Read the full report
• CoinShares: Institutional Adoption 2024: Explore the insightsCoinShares
• Chainalysis 2024 Global Crypto Adoption Index: View the index
• 2024 Institutional Investors Digital Asset Survey: Access the survey
• U.Today: Institutional Adoption of Cryptocurrencies: Read the analysis
• Coinbase Institutional: 2025 Crypto Market Outlook: Access the outlook
• An examination of North America’s role in crypto adoption: Explore the report