Why Are Crypto Exchanges Pushing Into Stocks, Forex, and Commodities?

A crypto trader’s desk today is very different than it was 10 years ago. On one screen, there could be a Bitcoin price chart, gold could be another, and at the bottom, there could be the price analysis chart of the S&P 500 index.

The purists of the past may be puzzled by seeing this development, but it is the reality now. Crypto investors don’t want to be limited anymore. They have gone macro-aware and want to diversify their portfolios so that they don’t get left behind.

The issue, however, is that traditional and cryptocurrency trading systems have been siloed in the past. Two separate accounts, two separate fee structures, and the need to switch screens constantly.

Crypto exchanges are aware of this friction, which led to them fixing this issue through consolidation: giving everything the users need on one screen.

Crypto exchanges of today are also offering tools to let traders dabble in stocks, forex, and commodities. That has shifted the definition of a cryptocurrency exchange in a major way.

Four Categories of Crypto Expansion into TradFi

Ever since cryptocurrency exchanges have decided to diversify their offerings, people have grown interested in how deep into traditional assets they have gone. Given below are the four categories, and the reason exchanges have chosen each one.

Precious and Industrial Metals

Precious and industrial metals were, and still are, the classic safe zones for crypto traders, as they already track these assets as macro indicators. Gold price, for instance, influences Bitcoin as a gauge of market risk and capital rotation. This relationship between physical gold and digital gold (BTC) now permeates through other assets. Whenever BTC drops, the gold price moves. Crypto traders often want to focus on both.

Energy Commodities

Energy prices feed into the broader inflation data. That inflation data is then used as fuel for crypto market sentiment. Fossil fuels often have a direct relationship with BTC, especially since many of them contribute to fueling Bitcoin mining farms. Traders watch the numbers closely to gauge their mining profits as well.

Global Indices

The cryptocurrency market by itself does not leave much room for hedging. With global indices, such as the S&P 500, Nasdaq 100, Dow Jones, FTSE 100, DAX, Nikkei 225, etc., crypto traders can gain broader market exposure without having to select individual stocks.

Forex and Equities

Now, the reason forex and equities are supported by some cryptocurrency exchanges is a simple one: they are easy to understand. Crypto traders who want to lean into the traditional space for the first time find that the learning curve associated with popular stocks like Apple, Tesla, Microsoft, Amazon, and NVIDIA is easy to get through.

Why Fee Structure Matters More for Active Traders

When there is asset diversification, there is a need to trade actively. Therefore, traders would often dive into TradFi futures. And with TradFi futures come two events where a fee needs to be paid separately. One is for opening the position and another is for closing it.

Those who are in the “buying-and-holding” business don’t have much to be concerned about. Active traders open and close multiple positions across multiple TradFi assets throughout the day, sometimes five times a day, and face ten fee events daily.

And as the fee compounds, the reduction in the final profit numbers starts to become visible. For active traders seeing this, it is important to get hold of an ecosystem that offers a low-fee or no-fee benefit.

What Does It Mean for the Trader

While the consolidation of traditional ecosystems within the crypto space is happening in full swing, the fee structure issue hasn’t been fixed properly yet. Thankfully, platforms have emerged that are tackling this situation in the best way possible.

BTCC, for instance, offers 0-fees on TradFi futures, covering everything from metals to energy commodities to global indices to US equities.

Such a system often brings more power to the trader, letting them trade diversified assets inside an active space without worrying about how much the fees could encroach on profits.

And the fact that such a system can exist within a single environment means traders also save money by not going to separate platforms for their traditional investment needs.