Wall Street On-Chain Part 3: Trading & Liquidity

This report compares liquidity between popular TradFi assets and major crypto assets, and delves into the development of crypto exchanges.

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Executive Summary

• Market liquidity refers to the ease with which assets can be quickly bought and sold in the market at stable prices. Indicators of liquidity include trading volume, bid-ask spread, market depth, and number of exchanges. 
• Compared to traditional finance (TradFi), which benefited from decades of infrastructure development, crypto assets trade across centralised and decentralised exchanges, characterised by more fragmented liquidity but also innovations. 
• In the spot market, the US equities’ average daily trading volume (US$655 trillion in the past 12 months) was much larger than crypto’s $62 billion, reflecting the gaps in market maturity and adoption. However, Bitcoin had a higher volume-to-market cap ratio than Apple Inc. (AAPL) in the past year, reflecting the 24/7 global crypto market and higher speculative activity. 
• In the futures market, daily crypto futures volume averaged $183 billion in the past year, with BTC taking up ~43% share. The TradFi futures market was significantly larger — the average daily notional value of E-mini S&P 500 futures was $517 billion in the past month. For crypto options, which represent a small but growing market, BTC and ETH options combined had an ~$3 billion average daily trading volume in the past year, representing only a fraction of TradFi’s liquidity.
• For exchange-traded funds (ETFs), the most popular TradFi ETFs (e.g., SPY) generally had higher fund flows than US spot BTC ETFs, but crypto ETFs have increasingly gained institutional interest, with BlackRock’s IBIT ranking as the 15th most-popular ETF by trading volume.
• Crypto trading benefits from a few unique features, including decentralised finance (DeFi) and automation with the use of smart contracts, as well as transparency, lower costs, and faster settlement using blockchain. 
• Crypto.com has built a robust ecosystem that offers various financial products to users and enhances market liquidity, including crypto trading, expansion into TradFi products, stablecoins, and ETFs. 
• As regulatory frameworks evolve globally, along with an increase in institutional adoption, there is potential for crypto to rival traditional equities in terms of accessibility and liquidity while maintaining its unique characteristics of bringing efficiency and transparency at lower costs. 

1. Introduction

Market liquidity refers to the ease with which assets can be quickly bought and sold in the market at stable prices. Liquidity is an important factor that impacts investor experience, ultimately supporting asset adoption, and markets with higher liquidity generally support high speed and ease of transactions.

Maintaining liquidity to support trading is especially important for crypto assets, which are generally characterised by high volatility, a large number of tokens with varying market caps, and a fragmented centralised and decentralised crypto exchange landscape. Indicators of liquidity include:

• Trading volume: The amount of an asset traded within a time period. A higher trading volume generally indicates higher market demand to support execution.
• Bid-ask spread: The difference between the price a buyer is willing to pay (bid) and the price a seller is willing to sell (the ask). A higher bid-ask spread typically indicates higher demand.
• Market depth: The bid and ask order sizes and volumes at different price levels. A 2% market depth, for example, would include all buy orders 2% above and sell orders 2% below the market price.
• Number of exchanges: The larger number of exchanges supporting each asset’s trading, the more flexibility and avenues for market participation, although there’s a trade-off with liquidity fragmentation.

Compared to traditional equities, crypto is characterised by its decentralised nature, 24/7 global trading, and technological innovations (e.g., DeFi and Automated Market Makers). 

This report compares the liquidity between equities and major crypto assets, including Bitcoin and Ethereum, as well as delves into the development of crypto exchanges.

2. Liquidity Comparison Between TradFi and Crypto

Compared to TradFi, which has benefited from decades of mature infrastructure development, crypto assets trade across centralised (CEX) and decentralised (DEX) exchanges, characterised by more fragmented liquidity and innovations. Crypto trading is also a 24/7 market compared to TradFi, which trades during regulated hours, hence offering more flexibility for investors. 

Here we compare the liquidity across TradFi (using equities as the example) and crypto, specifically across the spot, futures and perpetuals, options, and ETFs markets. 

2.1 Spot

With reference to data from Cboe Global Markets, US equities’ average daily trading volume in the past 12 months was $655 trillion and $865 trillion in the past month. This is significantly higher than that of crypto, with $62 billion in average daily trading volume (combining centralised and decentralised exchanges) in the past year and $51 trillion in the past month. This difference in trading scale reflects the gaps on market maturity and adoption between crypto and equity markets. 

However, compared to Apple Inc.’s stock (AAPL, equity with the highest market cap), BTC had a higher volume-to-market cap ratio in the past year. This suggests that a larger portion of Bitcoin’s market value is traded each day compared to Apple, reflecting the 24/7 global crypto market and higher speculative activity. Apple’s ratio (average of 0.4% in the past year) still indicates strong liquidity, but traditional equities typically have lower turnover due to market hours, institutional holdings, and lower speculative churn.

In terms of market depth, Bitcoin’s 2% bid and ask depth (values of buy and sell orders within a 2% price range of the market price) averaged $475 million daily in the past year, which was almost 2% of the average daily trading volume. This suggests relatively strong market depth and liquidity for this top-cap crypto to avoid large price slippage during trading. 

Crypto trading is relatively more fragmented. The crypto market cap stands at $3.1 trillion (at the time of writing), with 90% of the trading volume in April 2025 supported by ~40 exchanges (centralised and decentralised) globally, according to The Block and DefiLlama. In comparison, the US equities market is supported by ~16 exchanges. In particular, a large number of brokers support equities trading, who can settle orders internally or direct them to the stock exchange. On the other hand, each crypto exchange generally runs its own order book, which can create liquidity fragmentation.

2.2 Futures and Perpetuals

Daily crypto futures volume averaged $183 billion in the past year, around three times more than spot volumes. BTC futures volume averaged $107 billion in the past month, around 43% of the total crypto futures market. 

For US equity index futures, some of the most liquid contracts include the E-mini S&P 500, E-mini Nasdaq-100, and others traded on exchanges like the CME Group. As an example, for E-mini S&P 500 (Contract Unit: $50 x S&P 500 index), the average volume (notional value) and open interest of the futures were $517 billion and $590 billion, respectively, in the past month (based on $50 x S&P 500 daily closing price x futures trading volume), around five times  larger than the BTC futures market.

2.3 Options

As a hedging tool, options trading attracts a wide range of traders. Crypto options represent a small but growing market, with ~$3 billion average daily trading volume for BTC and ETH options (BTC & ETH are the main underlying for crypto options) combined in the past year (vs $183 billion for daily crypto futures and $62 billion for daily crypto spot, respectively). This suggests that the crypto futures market is around 60 times larger than that of the options markets.

For TradFi, an average of 57.3 million options contracts were traded in the US in the past month, according to Cboe Global Markets. An example is SPX index Options (options of S&P 500) on Cboe (Contract Multiplier: $100 x S&P 500 index), which had an average notional value of $403 billion traded in the past month. This presents that the average SPX options contracts volume was around 80% of the S&P 500 future index volume (E-mini S&P 500) in the past month. 

2.4 ETFs

In TradFi, ETFs generally provide access to a diversified portfolio of assets (e.g., SPY, QQQ) displaying high trading volumes, making them some of the most liquid instruments. US spot BTC and ETH ETFs have enabled traditional institutional investors to gain access to crypto exposure, broadening the investor base and trading activities of crypto. In fact, based on the past three months’ average daily share volume, BlackRock’s iShares Bitcoin Trust ETF ranked as the 15th most-highly traded exchange-traded product (ETP).

Comparing SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, and US spot BTC ETFs in the past year, SPY had larger monthly fluctuations of fund flows ($-21 billion to $15 billion) compared to BTC ETFs (-$3.6 billion to $6.5 billion). 

As more crypto ETFs are filed, along with optimism over a more crypto-friendly regulatory landscape, it is expected that more ETFs of various crypto tokens will be created, further boosting liquidity and institutional participation. 

2.5 Outlook

Crypto spot and ETF markets are expected to continue gaining trading momentum and liquidity compared to the TradFi counterparts. This growth is driven by greater regulatory clarity, rising institutional inflows and trends including real-world asset tokenisation. 

On the other hand, crypto derivatives markets, especially options, currently remain relatively underdeveloped. The nature of options trading – which has varying expiries and pricing models – present complexities and liquidity challenges. Options trading is more suitable for advanced strategies (e.g. volatility trading), while perpetuals trading is suitable for short-term traders for directional trading and leverage. From a market making perspective, providing options liquidity also requires sophisticated management of volatility, which can be demanding given crypto’s inherent volatile nature.  

Having said that, crypto derivatives play an important role in trading and are prone to innovation and further advancements. As institutional participation increases and the market continues to mature, demand for hedging and speculation will potentially drive the growth in crypto options, alongside futures. An example is the approval of options trading on US spot BTC and ETH ETFs by the US Securities and Exchange commission, which can signal a shift towards a more liquid crypto options market. Innovations in DeFi, for example options vaults which deploy deposited assets into vaults, can be a way for retail investors to participate in options trading. 

3. Development of Exchanges

The crypto trading infrastructure is characterised by developments driven by blockchain innovations to enhance liquidity, including DeFi, 24/7 access, fast settlement, and transparent data. These offer greater flexibility, efficiency, and inclusivity compared to the trading experiences in TradFi. 

3.1 Innovation on the Trading Infrastructure

DeFi and Disintermediation

DeFi platforms, built on blockchains, enable peer-to-peer trading without needing intermediaries like brokers or clearing houses. Smart contracts automate trade execution, settlement, and clearing, reducing reliance on centralised entities.

DEX aggregators search across multiple DEXs for the best prices to execute crypto trades. They aim to enhance user experience and address the problem of liquidity fragmentation amongst DEXs and blockchains.

Lower Costs and Faster Settlement

By eliminating intermediaries and using blockchain verification, crypto trading can offer lower fees and near-instant settlement times compared to TradFi, where transactions may take days and incur higher costs due to multiple intermediaries.

Transparency

All crypto transactions are recorded on a public, immutable blockchain ledger, providing transparency and auditability without relying on a central trusted party. TradFi relies on centralised ledgers controlled by institutions, which are less transparent to the public.

3.2 Crypto.com’s Ecosystem

Crypto.com has built a robust ecosystem that integrates various financial products to promote cryptocurrency adoption and enhance market liquidity. This comprehensive ecosystem integrates a wide range of financial products and services designed to enhance user experience and broaden market participation. The platform offers trading for over 200 cryptocurrencies.

Beyond crypto trading, Crypto.com is expanding into TradFi products, including stocks, ETFs, and banking services like multi-currency personal accounts and cash savings accounts. This expansion aims to create a seamless environment where users can manage both crypto and traditional assets in one place, fostering greater liquidity and market depth across asset classes.

Two of the key innovations in Crypto.com’s 2025 Roadmap are the planned launch of its own stablecoin and a Cronos ETF. The stablecoin is expected to add a new layer of utility within the ecosystem by providing a reliable, blockchain-native fiat alternative, which can facilitate faster and cheaper transactions, reduce volatility risks, and increase trading activity.

The Cronos ETF will offer a regulated investment vehicle, attracting institutional investors and increasing the token’s market liquidity by broadening access to mainstream capital markets. Additionally, Crypto.com’s institutional custody services and automated trading bots (such as Dollar-Cost Averaging and Grid bots) contribute to more efficient market operations by enabling smoother asset management and trading strategies.

Crypto.com’s role is evolving from a primary gateway for retail crypto trading, having served more than 140 million consumers globally, to becoming a critical infrastructure provider, partner, and innovator in a more institutionalised and regulated market. This aligns with Crypto.com’s mission — accelerate the world’s transition to cryptocurrency.

4. Conclusion

Although the overall liquidity in TradFi markets is significantly higher than the crypto market, BTC’s liquidity is comparable with some popular investment instruments in TradFi, including the spot, futures, options, and ETF markets.

In the spot market, Bitcoin’s volume-to-market cap ratio was higher than that of Apple Inc.’s, the largest US equities by market cap, reflecting crypto’s 24/7 flexibility and higher speculative activity. US spot ETFs have also increasingly gained institutional interest.

TradFi liquidity is generally higher than crypto in the derivatives market, especially for options because of the complexities of options in pricing and expiries and the relatively short history of crypto options. However, the crypto market has stood out with unique nuances: for example, the domination of perpetuals in the futures market. The approval of options trading on US crypto spot ETFs may also signal a potential shift towards a more mature options market for hedging and speculation.

As regulatory frameworks evolve globally, and as institutional adoption increases, there’s potential for the crypto market to rival traditional equities in terms of accessibility and liquidity while maintaining its unique characteristics of bringing efficiency and transparency at lower costs. Continuous innovations are also expected to continue improving user experience and crypto market liquidity.

Read the full report: Wall Street On-Chain Part 3: Trading & Liquidity

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Authors

Crypto.com Research and Insights team

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