TradFi giants enter the game, encryption trading platforms face reshaping

TradFi giants get on board, will the feast of encryption trading platforms eventually come to an end?

In a certain Siheyuan office, a seasoned financial professional is handling a busy workload. With a hint of redness in his eyes, he calmly says: "I've been very busy lately, having meetings until two in the morning every day." As a veteran of the TradFi industry, he has experienced financial crises and has navigated the global markets for many years. In recent years, he has started to pay attention to a field that was once considered "unreliable" by the traditional financial sector — virtual assets.

TradFi's attention to Web3 did not begin in 2025. As early as 2018, a certain trading platform launched Bitcoin and Ethereum trading features. Initially, it was just a supplement to the product line, allowing users to buy coins like purchasing stocks, without the need for a wallet or understanding encryption. Although this feature was not heavily promoted, it became a growth engine a few years later.

In the fourth quarter of last year, encryption contributed over 35% of the total net income for the platform, with trading volume surging by 455%, driving trading revenue to grow by 733% year-on-year, reaching $358 million, making it the largest source of income for the season. In the first quarter of 2025, encryption contributed over 27% of the total revenue, with trading income doubling year-on-year, reaching $252 million.

It is not technology that drives this change, but user demand. The platform adapts to users' trading habits and finds that cryptocurrency trading has become the core driving force for company growth. Subsequently, it gradually transformed from a centralized brokerage into a digital asset trading platform.

With this precedent, traditional financial institutions collectively decided to get on board the encryption market in 2025. They are not here to experience Web3 or invest in projects, but to dominate the encryption industry in the next decade.

In March 2025, the world's largest retail brokerage firm with an asset management scale exceeding $10 trillion announced that it would open spot Bitcoin trading services within a year. In May, one of Wall Street's top investment banks planned to integrate BTC and ETH into its trading platform, providing retail investors with direct trading channels. In the same month, the largest bank in the United States announced that it would allow customers to purchase Bitcoin. In July, a well-established British bank announced that it would open spot trading services for Bitcoin and Ethereum to institutional clients.

These financial giants control global capital channels, clearing networks, and fiat payment systems, managing assets worth hundreds of trillions of dollars, far exceeding the current total market value of 4 trillion in the encryption market. They are gradually laying out the encryption field based on the traditional finance compliance framework.

In the traditional financial system, having the authority to open accounts allows control over the flow of funds, customer relationships, and even pricing power. For a long time, encryption trading platforms defined narratives through listing tokens and controlled liquidity through deposits. Nowadays, this "asset entry" role is gradually being reclaimed by traditional finance.

An insider from a cryptocurrency trading platform revealed that they are in a state of high tension, busy every day negotiating partnerships, monitoring progress, and paying attention to user feedback, with almost no time to rest. The competition among platforms is fierce, vying for users, products, and traffic every day.

The growth potential in the industry is limited, coupled with immense external pressure, leading to this situation of stock game. TradFi is gradually encroaching on the core capabilities of encryption trading platforms, from fiat currency deposits to asset custody, from user account opening to spot matching. They enter the market with regulatory approval and a large user base, seemingly not intending to coexist peacefully with native encryption platforms.

In the face of this situation, almost all encryption trading platforms have launched coin-stock products. Users can buy tech stocks with USDT, leverage indices, and trade various stocks through on-chain contracts. This traditional asset on-chain solution has become a common action in the industry.

A certain trading platform took the lead in attempting to complete the development and launch of US stock token products within just two months. They believe that the core advantages of centralized trading platforms still exist. The real users accumulated over the years, strong liquidity, and trading depth are resources that external brokers cannot quickly replicate.

The launch of US stock tokens is to meet clear market demands, such as trading needs during off-hours or the needs of users who cannot access the traditional stock market due to geographical and compliance restrictions. The 24/7 trading characteristics of cryptocurrencies open up new liquidity spaces for traditional assets.

However, this does not mean a sure victory. The platform leader admitted that US stock tokens are still in the early stages, with participation and enthusiasm far less than that of newly launched coins. However, she remains optimistic about this direction, believing it represents the encryption industry expanding its gameplay into the TradFi world. New derivative scenarios of traditional assets on-chain, such as DeFi, synthetic assets, and on-chain staking, may be the true value of this path.

However, although these features seem to be actively exploring new markets, in the eyes of many, they resemble a form of passive defense. When trading platforms no longer dominate the "asset entry", they begin to try to demonstrate that they are still connected to the global market. Therefore, coin stocks have become the most common defensive strategy during this stage.

The concept of coin-stock is not new. As early as 2020, a certain trading platform proposed the coin-stock model and launched multiple stock/encryption trading pairs, which were seen as a challenge to the pricing logic of TradFi. At that time, the encryption industry was still in an aggressive phase, trying to reshape traditional financial trading methods with encryption finance. Looking back now, this model has been re-adopted, but it has lost its original spirit of initiative and resembles more of a self-preservation measure.

Data also confirms this point. After the launch of the coin-stock model, it initially drew community attention, but activity quickly receded, and attempts by various platforms failed to generate significant responses. In contrast, during the same period, the market for popular tokens on a certain public chain showed a completely different trend. A single social media message could rapidly drive the market capitalization of related tokens to the hundreds of millions, with daily trading volumes reaching tens of millions of dollars, far exceeding the weekly trading volumes of many coin-stock trading pairs.

The new features did not bring new users. At this stage, it no longer matters what features centralized exchanges launch. The key is why they are launching these features and whether these features can help regain the roles they are losing.

The recent craze in cryptocurrency and stocks does not stem from industry progress, but rather from the fact that no platform dares to take action. Kant once said: "Freedom is not about being able to do whatever you want, but rather about being able to refrain from doing what you do not want to do."

Recently, almost all encryption trading platforms have been discussing compliance issues. They are applying for licenses, adjusting their business structures, and bringing in executives with TradFi backgrounds, trying to prove that they have emerged from the early chaotic state and are more like a financial institution that can be accepted by regulators.

This is both an industry consensus and reflects collective anxiety. However, in the eyes of traditional financial practitioners, this understanding of compliance is still too shallow.

Many trading platforms obtain licenses in small countries to prove compliance, but these licenses are hardly recognized in the TradFi system. The real "ticket to entry" is not just a business license, but whether one can access the mainstream financial system—whether one can open mainstream bank accounts, use clearing and settlement networks, gain the trust of regulatory agencies, and conduct business cooperation with them.

This reflects a reality: under the scrutiny of TradFi, the encryption world has never been treated truly equally. The traditional financial system is built on a chain of responsibility and a trust loop, emphasizing the transparency of customer structures, risk control, auditing capabilities, and the interpretability of funding paths. In contrast, encryption platforms often grow in institutional gaps, relying on gray areas to maintain high profits and high growth, but rarely possess the ability to build these compliance foundations.

Insiders are aware of these issues, but no one cared before because there were no competitors. Now that TradFi institutions are getting on board and acting according to their own rules, the "industry practices" of the encryption sector have suddenly become a disadvantage.

Some platforms are indeed adjusting by introducing compliance audits, establishing offshore trust structures, and splitting their businesses in an effort to make themselves appear more standardized. However, many countries' regulatory agencies are not buying it. They may superficially cooperate in discussions, but in reality, they do not intend to incorporate encryption platforms into the formal financial system. No matter how hard these platforms try, they still only "look like" they are compliant in the eyes of regulators.

However, not all trading platforms are just superficial. Some platforms have become one of the few that truly break through regulatory barriers. This year, they became one of the first centralized trading platforms to obtain the European MiCA license and established their European headquarters in Vienna.

The platform does not deny the difficulties of this process and frankly acknowledges the regulatory doubts about the industry. However, as its person in charge said, the current regulatory bodies are no longer in the state of ignorance about encryption that they were five years ago. They are beginning to truly understand the business logic and technical structure of this industry. From technology and models to market promotion, the understanding of regulatory bodies is deepening, and the foundation for cooperation is becoming more solid.

The head of another trading platform revealed that they have obtained virtual asset licenses in multiple countries and have established local compliance frameworks based on regulatory requirements in various regions. They are actively promoting the application for MiCA licenses, hoping to establish a more stable business channel in the European market and lay the foundation for cross-border operations under a future unified regulatory framework.

Nevertheless, such successful cases are still rare. For most platforms, they not only lack licenses, networks, and trust endorsements within the TradFi system, but they are also losing the high growth dividends brought by the original institutional vacuum. They find the threshold too high when trying to transform compliantly; when attempting to return to encryption origins, they discover another group of competitors eyeing them.

Therefore, they can only continue to move closer to regulation, constantly discussing compliance, applying for licenses, and following procedures. Many times, these actions are not strategic choices, but a form of passive anxiety.

In the early hours, a person in charge of a certain trading platform was still responding to user questions in the community. Some inquired about the operation methods for coin stocks, others were concerned about the platform's recent compliance progress, and some asked about the handling plans for certain controversial incidents. He stated that he often works with colleagues until late at night, and staying up late has become the norm.

In a Siheyuan in Beijing, a senior executive from a Hong Kong brokerage is negotiating cooperation with several senior executives from listed companies. The reception room is only separated from the courtyard paved with blue bricks by a door, and the sound of insects is continuous under the shade of the trees.

At the same time, in Vienna, Austria, a certain trading platform has just held a ribbon-cutting ceremony for its new European headquarters. This is their European outpost established after obtaining the MiCA license, making them one of the first centralized trading platforms to complete this step, while also clearly recognizing that most of their peers are still groping forward.

Despite being in different locations and facing different emotions and rhythms, their statements resonate subtly: they all mention "changes are too fast", they all say "take it slow", and they are all contemplating the future development direction of the industry.

The premise of this "keep moving forward" is very different from a few years ago.

Encryption trading platforms may no longer be the central role in this world, no longer the starting point of all traffic and narratives. They are standing on the edge of a new order, gradually being pushed out of the core position by an invisible rule.

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

The encryption trading platform is still in operation, with new product features being launched as usual and announcements being continuously released. Their ways of expression are changing, the rhythm of their voices is changing, and the contexts they want to integrate into are also changing; everything is in flux.

Some changes are active choices, some are passively accepted, but more often, they are just trying to maintain a sense of presence without being eliminated by the times.

However, not everyone holds a pessimistic attitude. Some platform leaders believe that the impact of encryption on TradFi is greater than the latter's squeeze on centralized exchanges. They are optimistic about the trend of traditional financial institutions getting on board, as every round of evolution in the industry requires new participants. Centralized trading platforms have developed to this day and are continuously expanding their institutional client base, starting to venture into wealth management, asset allocation, and other areas. The businesses of both sides are intersecting and merging, "the two financial worlds resonate with each other, making it a moment full of opportunities."

But at the same time, everyone is aware that this advantage itself cannot completely eliminate anxiety.

Many questions still have no clear answers.

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0xSoullessvip
· 13h ago
Are the suckers going to change farms again?
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Ser_Liquidatedvip
· 15h ago
This wave of institutions coming in is like sharks entering a pond.
View OriginalReply0
RektRecordervip
· 08-09 14:04
It's still easier to play people for suckers with retail investors.
View OriginalReply0
ApeWithAPlanvip
· 08-09 14:04
License entry, play people for suckers out.
View OriginalReply0
BearMarketBrovip
· 08-09 14:02
Big capital plays suckers more professionally
View OriginalReply0
FlashLoanLordvip
· 08-09 13:49
Blockchain cannot escape regulatory get on board
View OriginalReply0
down_only_larryvip
· 08-09 13:47
This prosperous world is as you wish, bosses.
View OriginalReply0
IronHeadMinervip
· 08-09 13:35
What is meant to come will eventually come.
View OriginalReply0
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