Crypto Brokers: The New Gold Rush

“I’m on video calls until two in the morning these days.”

That’s what a seasoned financial expert, a veteran of the traditional brokerage world for over a decade, confessed. As he spoke, he gently placed his phone screen-down on the table. His eyes showed slight fatigue, but his demeanor remained calm.

His office, nestled within a traditional courtyard house (siheyuan) in Beijing’s Xicheng District, features aged, peeling paint on the main doors. Afternoon sun streamed into the courtyard, illuminating motes of dust dancing in the light. At a weathered wooden table, he tackles issues spanning regulatory compliance, strategic partnerships, and project management.

Since entering finance over ten years prior, he has navigated market volatility, including the last major economic downturn. His experience includes fund management, product development, and leading international teams. In more recent times, he’s turned his focus towards an area initially viewed skeptically by traditional finance – digital assets.

Traditional finance’s interest in Web3 didn’t suddenly appear in 2025. Looking back, many point to Robinhood as a key turning point.

This platform, renowned for its commission-free stock trading, began offering Bitcoin and Ethereum trading as early as 2018. Initially, it was a complimentary addition, enabling users to purchase cryptocurrencies like they would popular stocks, without the need for wallets or blockchain knowledge. This offering, initially understated, became a critical growth driver later.

In the final quarter of the previous year, cryptocurrencies accounted for over 35% of Robinhood’s total net income. Trade volumes rose dramatically by 455%, leading to a 733% year-over-year increase in trading revenue to $358 million. This made cryptocurrency Robinhood’s biggest revenue source for that period. In the first quarter of 2025, cryptocurrencies made up more than 27% of overall income, with trading revenues doubling compared to the previous year to $252 million.

Robinhood quarterly cryptocurrency asset trends, source: IO.FUND

This shift wasn’t caused by novel technology, but by the actions of countless users. Robinhood didn’t push a Web3 agenda; they simply adapted to how users wanted to trade, and discovered that cryptocurrency trading was no longer a niche business, but a core engine of company growth.

As a consequence, Robinhood progressively evolved from a conventional brokerage into a digital asset exchange platform.

Inspired by Robinhood’s success, traditional finance firms decided in 2025 to move past simply observing the crypto market and instead actively participate. Their aim isn’t just to explore Web3 or invest in specific ventures. The belief is that “Traditional finance will take the lead in the cryptocurrency landscape within the next decade.”

The clash between traditional brokerages and crypto-native platforms is well underway.

In March 2025, Charles Schwab, one of the largest retail brokerages globally with over $10 trillion in assets under management, announced plans to offer spot Bitcoin trading within the next twelve months.

In May 2025, Morgan Stanley, a prominent Wall Street investment bank, unveiled its intentions to officially integrate BTC and ETH into its E*Trade platform, giving retail investors direct trading options.

In May 2025, JPMorgan, the biggest bank in the United States and a previous crypto critic, communicated that they would enable clients to purchase Bitcoin.

In July 2025, Standard Chartered, a longstanding British bank concentrated on Asia, the Middle East, and Africa, announced it would begin offering spot trading services for Bitcoin and Ethereum to its institutional clientele.

These are major players that dominate the global financial architecture, controlling capital flows, clearing systems, and worldwide fiat payment networks. They manage assets valued at hundreds of trillions of dollars, while the entire crypto market presently has a capitalization of only $4 trillion.

Mainstream asset market cap ranking, source: Steemit Community

They are systematically establishing a presence in the crypto arena, adhering to traditional finance regulations. When a firm has the benefits of regulatory trust, user traffic, and clearing capabilities, it possesses everything required to establish a robust crypto trading network.

In the traditional financial model, control of account establishment means power over fund flows, customer relationships, and ultimately, pricing. For a considerable time, crypto exchanges established their value by token listings, and controlled liquidity through deposits. But the role of “asset entry,” which CEXs have retained for almost a decade, is slowly being reclaimed by traditional financial institutions.

“These cryptocurrency exchanges should be starting to worry.”

He speaks with restraint, without a hint of gloating. The unease might not stem only from the addition of a specific organization or the enactment of a certain policy, but from a growing recognition that crypto trading platforms may no longer be the only players at the financial table.

Strategies for Remaining Competitive

An individual from a cryptocurrency trading platform said that he often answers messages at 5:00 a.m. He examines collaboration possibilities during the day, monitors progress at night, and analyzes user community feedback late at night, which makes it difficult for him to get any sleep.

“In the face of anxiety, we can only seek survival.”

His concern stems from the rivalries between platforms, and the daily struggle to attract users, develop products, and increase traffic.

The root of this intense competition is the shrinking area for expansion within the sector and substantial external pressures.

Traditional finance is increasingly encroaching on the key skills that crypto exchanges need to survive – from fiat currency deposits to safeguarding assets, from client account registration to spot market matching. They provide regulatory certifications and millions of users, and they seem determined not to coexist alongside crypto-native platforms.

Almost all cryptocurrency trading platforms have quickly introduced tokenized stock products. Users can buy Apple shares with USDT, leverage Nvidia stock, or trade Tesla via on-chain contracts. These tokenization solutions have been introduced across multiple platforms, forming a common industry initiative.

Bybit moved the quickest. They created and launched U.S. stock token products in just two months, rapidly advancing from initial project conception to interaction with the XStocks team, and finally, product release.

According to Bybit, centralized trading platforms’ core strengths continue to be valuable. Real users, strong liquidity, and trading depth accumulated over the years are resources that external brokerages are unable to quickly duplicate.

The launch of U.S. stock tokens was motivated by a clear gap in the market, such as trading demands while markets are closed or geographical and regulatory barriers prohibiting users from accessing standard stock markets. The 24/7 nature of the cryptocurrency market unlocks new liquidity opportunities for traditional assets.

This does not mean this is assured. Emily, Bybit’s spot trading head, says that U.S. stock tokens remain nascent. Participation and interest are lower than that of high-traffic new tokens.

However, she is hopeful about this path because it represents cryptocurrency’s entry into the world of TradFi. DeFi, synthetic assets, and on-chain staking – these new derivative uses for traditional assets on-chain may reflect the value of this path.

While these efforts look like actively investigating new markets, many see them as just defensive strategies.

When trading platforms no longer hold the primary role of “asset entry,” they attempt to appear as if they are still connected to the world. As a result, tokenized stocks are the most popular defense mechanism at this time.

Tokenized stocks are not a new idea.

In 2020, FTX proposed the tokenized stock model, launching trading pairs like TSLA/BTC and AAPL/USDT, viewed as challenging traditional finance’s pricing methods.

At that time, the cryptocurrency sector was more assertive. FTX aimed to rewrite traditional finance’s trading approaches with crypto finance, and to price Nasdaq using crypto finance.

They may have understood that brokerages would be the greatest potential competitor for cryptocurrency trading platforms, so they took the initiative. Looking back, the industry has revisited this model, but its nature has changed. Following FTX’s demise, tokenized equities became a tourniquet instead of a battering ram.

The data supports this point.

After the release of the tokenized stock model, there was initial community interest, but activity declined quickly, and different platforms’ initiatives were unsuccessful.

In contrast, meme coins on Solana during the same period followed a completely different route. A single tweet from Elon Musk might raise the market value of related meme coins by hundreds of millions, with daily trading volumes in the tens of millions, which far outpaced numerous tokenized stock trading pairs’ weekly trading volumes.

Above: XStocks trading volume, source: Dune; Below: meme coin Ani trading volume, source: gmgn

New features, but not new users.

Right now, it does not matter which features CEXs implement, but rather the reasons behind them, and if the features can reclaim the role they are losing.

This current enthusiasm is motivated by fear of inaction, not progress.

Kant stated, “Freedom is not doing whatever you want, but being able to refrain from doing what you do not want to do.”

Compliance is Simply a Delusion

Recently, virtually all cryptocurrency trading platforms have been discussing compliance. They are all attempting to obtain licenses, restructure their organizations, and bring in executives with established financial backgrounds in an attempt to show that they have moved away from the wild era, and are increasingly resembling financial firms acceptable to regulators.

This is the industry’s consensus, as well as a shared concern.

However, the understanding of compliance is too superficial, in the perspective of finance professionals.

“Many trading platforms seek licenses in smaller countries to demonstrate compliance, but the licenses are hardly considered legitimate; they can’t even be recognized,” he says, in a tone that sounds more like industry common sense.

To “get to the table” does not mean having a business license, but connecting to the actual financial system – opening accounts at popular banks, utilizing clearing networks, and gaining regulators’ trust to participate in genuine business partnerships.

This represents a reality: from traditional finance’s viewpoint, the crypto world has never been treated as equal.

Traditional finance is based on responsibility and trust loops, with a focus on customer structures, risk management, audit skills, and funding path transparency. In contrast, crypto platforms often expand in the system’s loopholes, maintaining high profits and growth by taking advantage of legal grey areas, and they rarely have the skills to establish compliance foundations.

This is well understood in the industry, but previously, no one cared because there was no competition for the space. Now that traditional financial institutions are entering the picture, they operate under their own regulations, and the crypto sector’s “industry practices” have become major flaws.

Certain platforms are implementing compliance audits, offshore trust structures, and splitting operations to appear credible.

However, many regulatory bodies in various countries are not convinced. They superficially work with you to discuss processes, but never meant to treat you as part of the financial system. No matter how credible you appear, they may not keep you.

However, not all trading platforms are simply putting on a show. Bybit is one of the few that has truly passed regulations. They were among the first centralized trading platforms to obtain the European MiCA license this year and established their European headquarters in Vienna, Austria.

Bybit recognizes that the process is difficult, and recognizes the regulatory cynicism towards the industry. According to Emily, regulation is not the same as five years ago when they did not understand cryptocurrency. Regulatory agencies are starting to genuinely understand the industry’s business and technical structure. Their understanding is evolving from technology and models to market promotion, and the basis for collaboration is getting stronger.

Bitget’s Chinese director, Xie Jiayin, also stated that Bitget has obtained virtual asset licenses in numerous countries and has created local compliance structures according to local regulatory standards. The team is pushing for the MiCA license application, in order to establish a business channel in the European market and establish future cross-border operations under a unified regulatory framework.

Even with such cases, most platforms lack licenses, networks, and endorsements within the financial system, and are not profiting from previous institutional gaps. Attempting compliance-led transformations, they discover the difficulties are too high. Attempting to return to crypto-native status, they discover competitors with the same goal.

As such, they can only cooperate with regulators, and discuss compliance by applying for licenses and running processes. Often, actions are not strategic choices, but a response to anxiety.

The Game’s Halfway Point

At 5 a.m., Xie Jiayin is still replying to user questions. Some users asked about trading tokenized stocks, and the platform’s recent compliance progress, and others inquire about PUMP subscriptions and the company’s plans. The all-nighters are common among his colleagues.

A Hong Kong brokerage executive has tea and discussions with executives from listed companies during a Beijing afternoon. The reception room is divided by a carved wooden door. A blue-bricked courtyard outside has the sounds of insects in the shade of the trees.

Bybit’s European headquarters in Vienna, Austria has started operations, following the ribbon-cutting ceremony. This is their European base since obtaining the MiCA license. They are among the first centralized trading platforms to cross, while peers are still finding their way across.

Although in different environments with distinct attitudes, they all state that “the pace of change is too fast,” discuss “taking it slow,” and are wondering how the industry should advance.

The basis for advancing is different from a few years ago.

Cryptocurrency trading platforms may not be the center of the world, and they are not the start of traffic or narratives. They stand on the edge of a new system, pushed out of the core by a set of regulations.

Larger systems and capital are replacing narratives and structures.

Cryptocurrency trading platforms are releasing product features and announcements. Their modes of expression, communications, and what they seek to be have all changed.

Some changes are proactive, and others are reactive. Most are to keep the trading platform present and relevant.

Not everyone is pessimistic. Both Xie Jiayin and Emily believe the influence of cryptocurrency on traditional finance is greater than the pressure the latter puts on CEXs. They feel optimistic about traditional financial institutions entering the market, because every evolution requires new players and participants. Centralized trading platforms have expanded their institutional client base and have started engaging in wealth management and asset allocation. Each side is overlapping and merging. “The two financial worlds resonate, which is romantic.”

Everyone is aware this advantage does not exempt them from worry.

There will not be clear answers to questions. Will regulators allow cryptocurrency trading platforms to operate? Will traditional finance build alongside crypto trading platforms?

Do they have a chance to redefine themselves before the next wave of industry themes arrive?

No one is confident about answering these questions. Everyone is dealing with work by attending meetings, modifying products, applying for licenses, and waiting for feedback, while maintaining the current situation and waiting for a chance to be proactive.

Waiting for industry changes.