‍

Executive Summary

Liquid Mercury, founded by industry veteran Tony Saliba, is a leading provider of institutional-grade cryptocurrency trading solutions that bridge the gap between traditional finance and digital assets. As the cryptocurrency market experiences significant growth and increased institutional participation, Liquid Mercury offers a suite of advanced platforms (including Liquid Mercury Pro, OTC, Plus, and Exchange Solutions) that cater to professional traders, buy-side firms, and sell-side institutions. Through its technological solutions, deep liquidity access, and sophisticated workflow automation, the company enhances market efficiency and connectivity among key market participants. A client case study conducted for this report featuring K33 demonstrates substantial improvements in execution speed and operational efficiency after adopting Liquid Mercury's solutions. With their upcoming developments like support for OTC options trading, tokenized “real world asset” infrastructure, and enhanced options execution capabilities, Liquid Mercury is well-positioned to meet future market demands and contribute to the maturation of the cryptocurrency trading ecosystem.

1. Introduction

Background on the Evolving Crypto Trading Landscape

Over the past decade, the cryptocurrency market has experienced exponential growth, evolving from a niche asset class to a significant component of the global financial system.

‍

One of the largest contributors to the surge in digital asset prices and broader institutional adoption have been the Spot Bitcoin and Spot ETH ETFs.

‍

‍

Spot Bitcoin ETFs alone account for 5.36% of the total BTC supply or in dollar terms $104.9 billion. Recent events point towards this institutional adoption accelerating. Such an example comes from MicroStrategy who announced a $42 billion 3-year plan to acquire more Bitcoin. At an even higherevel we have seen Senator Cynthia Lummis voiced her confidence in advancing the Strategic Bitcoin Reserve bill early in President Trump's term. 

Originally introduced by Lummis in July, the Bitcoin Act outlines the establishment of a decentralized network of vaults across the United States for securely storing Bitcoin reserves. The proposal includes key provisions such as:

• The U.S. Treasury purchasing 200,000 BTC annually over five years, amassing a total of 1 million BTC.
• A requirement to hold the reserves for at least 20 years.
• Adoption of a proof-of-reserves system.
• Consolidation of all Bitcoin currently held by the U.S. government.

BlackRock has endorsed the U.S. strategic Bitcoin reserve plan, aligning with President-elect Trump’s pro-Bitcoin agenda, while state governments are actively working to establish their own reserves. Pennsylvania has introduced a Bitcoin Strategic Reserve Act, further increasing the likelihood of a national reserve under Trump’s administration. Additionally, Trump’s proposed Crypto Advisory Council is set to play a pivotal role in shaping crypto policy and overseeing the establishment of the strategic Bitcoin reserve.

Institutional participation has surged, driven by the potential for high returns and the desire for portfolio diversification. This shift has highlighted the need for professional-grade trading infrastructure capable of handling complex strategies, high volumes, and sophisticated risk management.

Traditional trading platforms often fall short in meeting the demands of institutional traders in the crypto space. The lack of advanced execution tools, limited connectivity, and insufficient automation impede efficient trading operations. As the market matures, there is an increasing demand for solutions that bridge the gap between traditional finance and digital assets. 

Purpose and Scope of the Report

The purpose of this report is to:

• Showcase Liquid Mercury's offerings and how they address the needs of professional crypto traders.
• Analyze the competitive landscape, highlighting Liquid Mercury's unique position in the market.
• Demonstrate the company's impact through a client case study.
• Provide insights into future trends and how Liquid Mercury is positioning itself for continued success.

The report combines information provided by Liquid Mercury, independent research, and insights from industry experts to present a holistic analysis.

2. Company Overview

History and Background

Liquid Mercury was founded by Tony Saliba, a recognised expert in the trading industry with a career spanning over three decades. He has been instrumental in advancing trading technology, workflow automation, and execution services, and was the recipient of the U.S. Options Lifetime Contribution Award, which acknowledges his impact on the financial markets.

• LiquidPoint (1999): Tony Saliba founded LiquidPoint to address the need for advanced trading technology and execution solutions in the options market. The company quickly became a significant player in the industry, achieving top-three rankings in execution volumes, alongside Citadel Securities and Susquehanna. LiquidPoint was sold to the Bank of New York ConvergEx in 2007, reflecting its established market position. Saliba has received multiple US patents for his designs and development in workflow automation used by LiquidPoint.  
• Matrix Executions (2018): Following the success of LiquidPoint, Tony Saliba founded Matrix Executions, focusing on institutional execution services. The platform grew rapidly, ranking fifth in overall execution volumes, further solidifying his expertise in building technology-driven trading solutions.

Recognising the increasing importance of cryptocurrency markets, Tony brought together a team of experienced professionals—including leadership from LiquidPoint and Matrix Executions—to establish Liquid Mercury. The company aims to provide institutional-grade trading solutions tailored to the needs of professional cryptocurrency and digital asset traders.

‍

Mission and Vision

Mission

Liquid Mercury’s mission is to empower professional cryptocurrency trading and rapidly emerging Real World Assets by providing advanced, institutional-grade tools and technologies. The company is dedicated to delivering a comprehensive trading ecosystem that meets the demands of professional traders, buy-side firms, and institutional sell-side participants, bridging the gap between traditional financial markets and digital assets.

‍

Vision

Liquid Mercury envisions becoming the preferred platform for institutional and professional cryptocurrency trading. The company is focused on offering robust infrastructure, deep liquidity access, and sophisticated workflow automation, all while maintaining the highest standards of reliability and scalability. Its vision reflects a commitment to advancing the cryptocurrency market by enabling institutional-level performance, risk management, and execution capabilities.

Core Values Underpinning the Mission and Vision:

• Professional-Grade Tools: Liquid Mercury prioritizes pro-level functionality, offering trading platforms and algorithms designed for institutional workflows.
• Institutional-Grade Standards: The platform is built to meet the stringent requirements of professional trading, including high-speed execution, low-latency infrastructure, and seamless integrations.
• Market Connectivity: By connecting users to top-tier exchanges, OTC liquidity providers, and custody solutions, Liquid Mercury ensures that traders have access to a complete ecosystem for cryptocurrency trading.
• Innovation-Driven: The company continually enhances its offerings with features like advanced algo engines, complex order books,and Request for Quote (RFQ) networks, staying ahead in a rapidly evolving market.

This focus enables Liquid Mercury to serve as a bridge between traditional finance and the cryptocurrency sector, ensuring traders can operate with confidence and efficiency in both established and emerging markets.

Key Partnerships with industry leaders:

‍

‍

A portion of Liquid Mercury's industry news and media contributions can seen as below; 

For the next section of this report, we will dive into the various product offerings that Liquid Mercury has.

3. Product and Service Offerings Overview

3.1 Liquid Mercury Pro

Overview

To begin with, we will first look at Liquid Mercury Pro which is a comprehensive trading platform designed to meet the demands of professional and institutional cryptocurrency traders. By combining cutting-edge technology with deep liquidity access and advanced workflow automation, it embodies Liquid Mercury's commitment to delivering institutional-grade solutions that empower traders to execute complex strategies (spreads, synthetics, etc.) with precision and efficiency.

Sell-Side Capabilities

High-Touch Workflows

The platform offers robust sell-side capabilities tailored for brokers and institutional agency participants who manage trades on behalf of clients. Liquid Mercury Pro facilitates high-touch workflows by enabling Direct Market Access (DMA), allowing brokers to execute trades swiftly and efficiently. The system streamlines post-trade processes, including trade booking, allocation handling, and reconciliation, ensuring accuracy and compliance throughout the transaction lifecycle. Moreover, it supports the facilitation of crossing agency-executions and participation in block trades through an anonymized RFQ network, which enhances the ability to execute large orders discreetly without revealing trading intentions.

Customized Pricing Models

Understanding that institutional traders often rely on proprietary methodologies, Liquid Mercury Pro allows for the integration of proprietary theoretical pricing models, custom Greeks, and volatility surfaces directly into its portfolio and risk management modules. This feature enhances pricing precision and enables sophisticated risk analysis, aligning the platform's functionalities with the unique strategies and risk management frameworks employed by individual trading firms.

Order and Execution Management

Institutional-Grade OEMS

At the heart of Liquid Mercury Pro is its advanced OEMS, built to meet institutional standards. The platform supports advanced order staging with parent-child relationships, enabling traders to deconstruct complex strategies into executable components. This capability is particularly beneficial when managing large orders or intricate trading strategies that require execution across multiple venues or over extended periods. The multi-venue execution management feature allows traders to aggregate views and execute orders simultaneously across various exchanges and OTC providers, optimizing execution efficiency and maximizing access to liquidity.

Algorithmic Execution Strategies

Liquid Mercury Pro offers a suite of customizable algorithmic trading tools designed to cater to diverse trading needs:

• Time-Weighted Average Price (TWAP): This algorithm executes orders evenly over a specified time frame to minimize market impact and achieve an average execution price close to the time-weighted average price.
• Liquidity Seeking Algorithms: These tools dynamically search for optimal liquidity across multiple venues, enhancing the likelihood of favorable execution prices and reducing slippage.
• Spreaders: Ideal for executing multi-leg trades, spreaders manage each leg individually to optimize pricing and manage the risk associated with timing discrepancies between legs.
• Wave Instructions: This feature adjusts orders dynamically based on real-time market conditions and liquidity availability, allowing traders to respond swiftly to volatility and changing market dynamics.

Global Connectivity

Comprehensive Market Access

Liquid Mercury Pro provides extensive global connectivity, integrating with top-tier spot and derivatives exchanges such as Binance, Kraken, and Coinbase. This broad market access ensures that traders can engage with a wide array of trading venues, enhancing opportunities for arbitrage and diversification. The platform also connects with leading OTC liquidity providers like Cumberland, B2C2, DV Chain, and Jane Street, offering access to deep pools of liquidity that are crucial for executing large trades efficiently.

An anonymized RFQ network further augments the platform's connectivity by enabling traders to source liquidity for large block trades discreetly. This feature minimizes market impact by preventing the disclosure of trading intentions, which could otherwise influence price movements adversely.

Custody and Settlement Partners

Recognizing the importance of secure asset handling, Liquid Mercury Pro offers integration with world-class custodians, including Fireblocks, Gemini, and BitGo. These partnerships ensure that digital assets are stored securely and that settlement processes are efficient and reliable. The integration with custodial solutions not only enhances operational security but also facilitates compliance with regulatory requirements related to asset custody.

Multi-Asset Support

Liquid Mercury Pro supports a diverse range of trading instruments, enabling traders to implement sophisticated strategies across multiple asset classes. The platform allows for trading in spot cryptocurrency pairs, providing access to major cryptocurrencies, altcoins, and stablecoins. Additionally, it supports derivatives trading, including futures, perpetual swaps, and options, offering avenues for hedging, speculation, and income generation through various market conditions.

The platform's capability to handle multi-asset and multi-leg spreads is particularly noteworthy. Traders can execute complex strategies involving up to three legs per venue, with plans to expand support to twelve legs across multiple venues in the future. This flexibility allows for advanced arbitrage opportunities and the construction of intricate trading strategies tailored to specific market views.

Advanced API Suite

Comprehensive Integration Options

Liquid Mercury Pro's advanced API suite offers integration and automation capabilities. The platform provides a Financial Information exchange (FIX) API, enabling connectivity with external order management and execution systems. This adherence to industry-standard protocols facilitates interoperability with existing trading infrastructures, reducing the need for extensive system overhauls.

Flexibility for Customized Automation

Beyond the FIX API, the platform offers additional crypto-friendly web socket and REST APIs for programmatic trading, RFQ management, trade reporting, and back-office functions. These APIs empower high-frequency traders and enterprises to automate trading activities and customize workflows according to their specific operational requirements. The ability to programmatically control trading processes enhances scalability and efficiency, allowing firms to respond rapidly to market opportunities and optimize resource utilization.

Customization and Risk Management

Full Configurability

Liquid Mercury Pro emphasizes customization, providing traders with full configurability over key aspects of their trading environment:

• Order Display Options: Traders can choose between visible or hidden postings on exchanges, enabling strategies that require discretion or market signaling.
• Risk Controls: The platform includes comprehensive risk management features, allowing traders to set slippage thresholds to control acceptable price deviations during execution, define maximum exposure limits to mitigate concentration risk, and specify time-to-live parameters for both parent and child orders to manage order validity.

Proprietary Risk Metrics and Pricing Models

The platform supports the integration of proprietary risk metrics and pricing models, ensuring that traders can maintain alignment with their internal risk management policies and trading strategies. This flexibility allows firms to leverage their unique insights and methodologies within the robust environment.

Benefits for Professional Traders

Liquid Mercury Pro provides a range of features designed to meet the specific needs of professional traders in the cryptocurrency markets. The platform focuses on facilitating optimal execution, streamlining workflows, offering access to deep liquidity, providing customization and scalability, and adhering to institutional-grade standards.

Achieving Optimal Execution

The platform is built on a low-latency infrastructure that supports rapid trade execution, which is important for traders employing high-frequency or algorithmic strategies. By aggregating liquidity from connected exchanges and OTC providers, Liquid Mercury Pro enables traders to access competitive pricing across multiple venues. This aggregation can help reduce market impact and slippage, contributing to more favorable execution outcomes.

Streamlined Workflows

Liquid Mercury Pro integrates various trading processes into a single platform, including order staging, execution, trade booking, and post-trade reporting. This integration can reduce operational complexity by minimizing the need to use multiple systems, thereby improving efficiency. The platform also automates middle- and back-office functions such as credit limit management and post-trade settlement, which may save time and reduce the likelihood of errors associated with manual processes.

Access to Deep Liquidity

By providing direct integration with a range of top-tier exchanges and OTC liquidity providers, the platform offers traders access to diverse liquidity sources. The anonymized RFQ functionality allows traders to execute larger block trades discreetly, which can help minimize market disruption and potential price slippage associated with revealing large trading intentions. Liquid Mercury has more venues scheduled for integration.

Customization and Scalability

Liquid Mercury Pro offers configurable execution settings, risk management tools, and API integrations. This allows traders to tailor the platform to their specific strategies and operational requirements. The platform is designed to support various trading styles, from discretionary strategies to algorithmic execution, and can scale as client needs evolve.

Institutional-Grade Standards

The platform aims to mirror the reliability and performance characteristics found in traditional financial market systems. By incorporating features that support regulatory compliance, operational resilience, and secure trade execution, Liquid Mercury Pro seeks to meet the standards expected by institutional traders. Its architecture includes measures intended to ensure secure handling of trades and adherence to relevant regulatory requirements.

3.2 Liquid Mercury OTC

Overview

Liquid Mercury OTC is a trading platform developed to modernize the workflows of OTC brokers and liquidity providers. It facilitates the transition from traditional communication methods to fully electronic, end-to-end trading operations. The platform is designed to address operational inefficiencies associated with manual processes, aiming to improve scalability and client service within OTC trading businesses.

Features

24/7 OTC Pricing with Real-Time Quotes

The platform supports continuous, around-the-clock pricing, enabling brokers and liquidity providers to offer real-time, actionable quotes to counterparties at any time. Customizable pricing options allow firms to configure either indicative or dealable quotes, aligning the quoting process with specific business needs and market conditions.

Global Connectivity

Liquid Mercury OTC integrates with a range of liquidity providers, including firms like Cumberland, B2C2, DV Chain, and Jane Street. This connectivity provides access to deep liquidity pools for both spot and derivatives trading. Additionally, the platform connects with leading custodial solutions such as Fireblocks, Gemini, and BitGo, facilitating secure and efficient trade settlement processes.

Turnkey and Custom White-Label Options

The platform offers fully branded white-label solutions, allowing firms to launch bespoke OTC trading platforms under their own brand identity. This can be achieved through standalone applications or by integrating the platform into existing infrastructure, providing flexibility to accommodate various business models and operational preferences.

Complete API Suite

Liquid Mercury OTC provides a suite of APIs that enable programmatic access to quoting, trading, reporting, and back-office operations. These APIs are designed to support scalability, allowing firms to integrate the platform with enterprise systems or to offer API access to their own clients, facilitating automation and customization.

Configuration Options

• Single-Dealer Mode: This configuration is suitable for market makers who wish to quote prices directly to clients. It includes options for inventory management and the ability to match internal order flow, supporting firms that prefer to manage client interactions and pricing independently.
• Multi-Dealer Mode: This mode enables brokers to access and aggregate liquidity from multiple providers. By connecting to various liquidity sources, firms can offer clients competitive pricing and execution, potentially enhancing trading outcomes.

Impact on Scaling OTC Trading Businesses

Efficiency Gains

Automating processes related to quoting, trading, and settlement can reduce the time and resources required to manage trades. Liquid Mercury OTC includes integrated tools for trade lifecycle management and client communication, such as compliant trade-integrated chat features, which may streamline operations. Features like automated spread markups and client group customization allow firms to scale their operations while aiming to maintain efficiency and accuracy.

Enhanced Client Experience

The platform is designed to provide clients with an enhanced trading experience, offering real-time visibility into trades, order history, wallet balances, and settlement instructions. Customizable dashboards and user interfaces enhance usability, and features like integrated charting and trading analytics can support clients in making informed decisions. The availability of 24/7 pricing and automated workflows may contribute to faster turnaround times, potentially fostering stronger client relationships.

Overall, Liquid Mercury OTC serves as a solution for brokers and liquidity providers seeking to modernize their OTC trading operations. By offering features that address both operational efficiency and client experience, the platform provides options for firms aiming to scale their businesses effectively. Its flexibility through configuration options and integration capabilities allows firms to tailor the platform to their specific needs, supporting the transition to fully electronic trading platforms in the OTC market.

3.3 Liquid Mercury Plus

Overview

Liquid Mercury Plus is a fully integrated trading solution designed for companies and financial institutions seeking to offer cryptocurrency trading services to their clients. As a turnkey platform, it aims to reduce the operational and technological barriers associated with launching crypto trading offerings, enabling firms to enter the market more efficiently.

The platform is developed in collaboration with Gemini, a regulated cryptocurrency exchange and custodian. This partnership provides secure asset handling, robust fiat on/off ramps, and compliance with regulatory standards. By leveraging this collaboration, businesses can offer their clients institutional-grade infrastructure without the need for extensive internal development or resources.

Features

Access to Institutional-Grade Liquidity

• Connectivity to Top-Tier Liquidity Providers: Liquid Mercury Plus connects to a network of leading liquidity providers, offering tight spreads and substantial market depth across a wide range of cryptocurrency pairs. This access is intended to provide clients with competitive pricing and execution quality.

Single Point of Access

• Integrated Client Onboarding, Trading, and Settlement: The platform combines multiple processes into one streamlined solution, potentially reducing complexity for firms and enhancing the user experience for clients.
• Fiat On/Off Ramps and Custody via Gemini: Integration with Gemini's services enables businesses to support various trading and settlement needs, including secure custody and efficient handling of fiat currencies.

Client-Facing Trading Platform

• Customizable User Interface: Offers a professional trading platform that can be tailored to match the branding and functionality requirements of partner firms.
• Comprehensive Trading Features: Includes real-time market data, trading history, wallet balances, and analytics tools to provide a complete trading experience for end users.

API Suite for Partners

• Integration Capabilities: Provides a robust set of APIs that allow enterprise clients to integrate Liquid Mercury Plus into their existing systems. This includes programmatic access to trading, reporting, and settlement functionalities.
• Support for Client APIs: Partners have the option to extend API access to their own clients, accommodating high-frequency trading or customized workflows.

Value Proposition for Clients

Liquid Mercury Plus is positioned as a solution for companies aiming to offer cryptocurrency trading without incurring significant operational and technological investments. By utilizing Liquid Mercury’s technology and liquidity network, businesses can provide a comprehensive crypto trading experience while concentrating on their core competencies.

Key Benefits

• Fast Time-to-Market
  • Rapid Deployment: Firms can deploy a branded trading platform or integrate the solution into existing systems promptly, allowing them to enter the market without substantial delays.
• Cost Efficiency
  • Reduced Development Requirements: The turnkey nature of the platform minimizes the need for extensive internal development and ongoing operational overhead, which may lower the costs associated with launching and maintaining a crypto trading service.
• Enhanced Client Offering
  • Comprehensive Trading Experience: By providing access to institutional-grade liquidity, integrated onboarding, and a robust trading platform, firms can offer a competitive and comprehensive trading service to their clients.

Conclusion

Liquid Mercury Plus is intended for businesses looking to enter the cryptocurrency market or to enhance their current offerings without undertaking significant operational or technical complexities. The platform enables partners to deliver a professional trading solution, allowing them to focus on their primary business objectives while potentially expanding their service portfolio to meet growing client demand for digital asset trading.

3.4 Exchange Solutions

Overview

Liquid Mercury offers a suite of solutions designed to build and enhance cryptocurrency exchanges. These solutions cater to both new entrants and established platforms, providing institutional-grade infrastructure and capabilities that support robust, scalable, and low-latency operations. Whether deployed as a complete exchange system or as modular components to augment existing setups, Liquid Mercury's technology aims to meet the evolving demands of the cryptocurrency trading landscape.

Features

White-Labeled Front-End Trading Platform

Liquid Mercury provides a customizable trading interface tailored to the needs of both professional traders and retail users. The platform supports a wide range of functionalities, including market and limit orders, Request for Quotes (RFQs), order blotters, trade history, and position monitoring. Exchange operators have the option to deploy pre-designed templates for quick implementation or develop fully bespoke interfaces that align with their unique branding and functionality requirements.

High-Performance Matching Engine

At the core of the exchange solution is a high-performance matching engine designed for low-latency and high-capacity trade matching. It supports trading across various instruments, including spot pairs and crypto derivatives such as futures, perpetuals, and options. The matching engine accommodates advanced order types, including market, limit, stop-limit, all-or-nothing (AON), and time-based contingencies like Good-Til-Canceled (GTC) and Immediate-Or-Cancel (IOC). The system can be configured as a lit exchange, where order books are transparent, or as a dark liquidity pool, depending on the trading model preferred by the exchange.

RFQ Network for Block Trading

The platform includes an RFQ network that enables participants to execute block trades by accessing liquidity from Liquid Mercury's network of professional traders and brokers. This feature supports multi-asset and multi-leg strategies, allowing trading across single or multiple venues. Traders can choose between anonymized or disclosed workflows based on their preferences and requirements, facilitating the efficient execution of large orders with minimal market impact.

Complex Order Book

Liquid Mercury's exchange solutions offer a complex order book that supports multi-leg and multi-asset strategies. This functionality allows users to execute net price structures for options, futures, or spot pairs. The complex order book can be deployed as a standalone feature or integrated as an overlay to enhance an existing exchange's order book. By creating implied spread markets based on single-leg data, it enhances trading opportunities and liquidity for complex strategies.

Comprehensive API Suite

A key component of the solution is the suite of APIs that facilitate integration and scalability. The APIs cover order management, RFQ processes, trade reporting, and third-party integrations. Designed for flexibility, they support seamless connectivity to external custody services, settlement systems, and liquidity solutions, enabling exchange operators to customize and expand their platform's capabilities as needed.

Value Proposition for Exchange Operators

Liquid Mercury's exchange solutions aim to provide a robust foundation for building high-performance cryptocurrency exchanges. The key benefits for exchange operators include:

Efficiency and Scalability

• Modular Architecture: The solutions are designed with a modular architecture that allows exchanges to scale operations seamlessly as transaction volumes and client bases grow. This modularity supports the addition of new features or capacity without disrupting existing services.
• Low-Latency Infrastructure: The platform's infrastructure is optimized for low-latency performance, ensuring high-speed execution and reliable operation even during peak trading periods.

Customization and Branding

• White-Label Solutions: Exchange operators can launch fully branded platforms using Liquid Mercury's white-label solutions, minimizing the time and resources typically required for development.
• Bespoke Interfaces and Workflows: The ability to create customized user interfaces and workflows allows exchanges to align the platform with their specific business models and user experience goals.

Enhanced Liquidity and Trading Capabilities

• Access to Institutional-Grade Liquidity: By connecting to Liquid Mercury's network of liquidity providers, exchanges can offer their clients improved trading conditions with access to deep liquidity pools.
• Advanced Trading Tools: Features such as complex order books and RFQ networks cater to sophisticated trading strategies, which can attract professional traders and enhance the exchange's competitive position.

Rapid Deployment

• Pre-Built Components: The availability of pre-built components like the front-end trading platform and matching engine enables new exchanges to expedite their go-to-market timelines.
• Modular Enhancements: Existing exchanges can selectively implement modular components to enhance their current systems without undertaking a complete infrastructure overhaul.

Institutional Compliance and Security

• Integration with Custodians and Settlement Providers: The platform supports integration with reputable custodians, settlement providers, and banking systems. This integration facilitates secure and compliant trade execution and settlement processes, which are essential for maintaining trust and meeting regulatory requirements.

Ideal Use Cases

• New Exchanges: Companies entering the cryptocurrency exchange market can leverage Liquid Mercury's turnkey solutions to establish a competitive presence efficiently.
• Existing Exchanges: Established platforms seeking to upgrade operational efficiency or expand trading capabilities can implement specific modular components, such as the matching engine, RFQ network, or complex order book, to enhance their offerings.

Overall, Liquid Mercury's exchange solutions are designed to empower operators by providing professional-grade trading platforms that meet the demands of both institutional and retail clients. By focusing on operational flexibility, scalability, and advanced trading functionalities, the platform supports exchange operators in delivering a high-quality trading experience. The combination of customizable features, integration capabilities, and support for complex trading strategies positions Liquid Mercury as a viable option for exchanges aiming to strengthen their market position and adapt to the evolving needs of the cryptocurrency trading ecosystem.

4. High-level Overview of the Crypto Trading Technology Market

The cryptocurrency trading technology market has experienced significant growth, driven by increased institutional adoption and the maturation of digital asset markets. Several key trends are shaping this dynamic landscape:

Institutional Adoption

Traditional financial institutions are increasingly entering the digital asset space, necessitating robust trading platforms that offer institutional-grade features. This shift is driven by the growing recognition of cryptocurrencies as a legitimate asset class and the potential for diversification and high returns. Institutional investors require platforms that provide advanced security measures, compliance with regulatory standards, and the ability to handle large transaction volumes.

Regulatory Developments

Evolving regulations around the world are prompting trading technology providers to enhance compliance features and adapt to new legal frameworks. Regulatory bodies are focusing on areas such as AML, KYC protocols, and market integrity. Trading platforms must therefore integrate robust compliance mechanisms to meet these requirements, which is essential for gaining the trust of institutional clients and operating across multiple jurisdictions.

Technological Advancements

The integration of advanced technologies like AI, machine learning, and blockchain innovations is leading to more sophisticated trading tools and platforms. These technologies enable enhanced analytics, predictive modeling, algorithmic trading, and automation, which can improve execution speed and decision-making processes for traders. Additionally, advancements in blockchain technology contribute to more secure and transparent transaction recording.

Market Volatility

The inherent volatility of cryptocurrency markets requires platforms to offer advanced risk management tools and real-time analytics. Traders need capabilities that help them navigate rapid price fluctuations, such as dynamic margining, real-time monitoring of positions, automated stop-loss orders, and comprehensive reporting tools. Effective risk management features are crucial for both individual traders and institutions to protect their investments and comply with internal risk policies.

Liquid Mercury's Market Position

Liquid Mercury distinguishes itself in the competitive landscape through several unique selling propositions and strengths:

Institutional-Grade Infrastructure

Built by professionals for professionals, Liquid Mercury offers a platform with institutional-grade infrastructure, including low-latency execution and high reliability. The platform is designed to handle large trading volumes and complex order types, providing access to deep liquidity pools essential for executing sizable orders efficiently. Robust security measures and compliance features align with institutional requirements.

Comprehensive Solutions

Liquid Mercury provides end-to-end solutions for both buy-side and sell-side participants. This includes advanced order and execution management systems (OEMS), global connectivity to various exchanges and liquidity providers, multi-asset support covering spot and derivatives markets, and advanced APIs for integration and automation. The platform supports sophisticated trading strategies and offers tools for risk management and compliance reporting.

Customization and Flexibility

Offering turnkey and fully customized white-label solutions, Liquid Mercury allows clients to tailor the platform to their specific needs and branding. This flexibility enables firms to differentiate themselves in the market, align the platform's functionalities with their unique trading strategies, and integrate seamlessly with existing systems. Customization options extend to user interface design, workflow configurations, and feature sets.

Strategic Partnerships

Liquid Mercury has established collaborations with leading institutions, enhancing its platform capabilities and trustworthiness. Notably, its integration with Gemini for settlement and custody services provides secure asset handling and regulatory compliance. These partnerships expand the platform's services, offering clients additional features like fiat on/off ramps and secure custodial solutions, which are critical for institutional adoption.

Experienced Leadership

Liquid Mercury benefits from leadership with deep industry knowledge. Tony Saliba's experience and reputation in professional trading contribute to the company's credibility and inform its approach to developing solutions that meet the complex needs of institutional clients. The leadership team's background ensures an understanding of the challenges faced by professional traders and the importance of delivering reliable and effective tools.

Positioning in the Market

These differentiators position Liquid Mercury as a competitive player in the broader market. By offering tailored solutions that address the specific requirements of institutional clients, the company bridges the gap between traditional financial markets and the digital asset space. Liquid Mercury's focus on institutional-grade infrastructure, comprehensive service offerings, customization capabilities, strategic partnerships, and experienced leadership contribute to its standing as a provider of professional-grade trading platforms.

5. Impact on the Crypto Trading Ecosystem

Connecting Market Participants

Liquid Mercury plays a pivotal role in the cryptocurrency trading ecosystem by serving as the connective tissue that links key market participants. By seamlessly integrating sell-side brokers, buy-side firms, and exchanges, the platform creates a unified environment where professional traders and institutions can operate with greater efficiency and scalability. Through its infrastructure and expansive network, Liquid Mercury ensures that all participants have access to essential tools, liquidity, and trading capabilities necessary to succeed in the rapidly evolving digital asset market.

Role as Connective Tissue in Trading

Facilitating Liquidity Flow

Liquid Mercury functions as a central hub, connecting liquidity providers (such as OTC desks and market makers) with liquidity takers, including asset managers and professional traders. Its multi-dealer Request for Quote network fosters deeper liquidity by enabling both anonymized and disclosed block trades across various venues. This setup allows for improved execution even for large orders, as participants can access multiple liquidity sources without revealing their trading intentions, thereby minimizing market impact.

Bridging Technology Gaps

By offering white-label solutions and a suite of APIs, Liquid Mercury provides institutions with the technology needed to participate in cryptocurrency markets without the necessity of developing proprietary systems. This role is particularly significant for traditional financial firms expanding into digital assets, as it reduces barriers to entry and accelerates adoption by supplying essential infrastructure and tools.

Supporting Market Diversity

Liquid Mercury caters to a wide range of market participants:

• Sell-Side Institutions: Brokers, liquidity providers, and market makers utilize Liquid Mercury's tools for trading on behalf of clients, managing inventory, and providing liquidity. The platform's features enable these participants to operate more effectively and offer enhanced services to their clientele.
• Buy-Side Firms: Asset managers, hedge funds, and proprietary trading firms leverage Liquid Mercury’s professional-grade tools for execution, portfolio management, and risk analysis. Access to deep liquidity pools and sophisticated trading capabilities allows them to implement complex strategies and optimize execution quality.
• Exchanges: Both new and established exchanges benefit from Liquid Mercury’s modular infrastructure, including matching engines, RFQ networks, and complex order books. By enhancing technological capabilities, exchanges can offer improved services, attract more participants, and contribute to a more robust trading environment.

Enhancing Market Efficiency

Liquid Mercury contributes to market efficiency through several mechanisms:

Automation and Workflow Optimization

The platform automates processes that have traditionally been manual, such as OTC trade negotiations that relied on voice calls or instant messaging. By digitizing these workflows, Liquid Mercury increases speed, reduces the potential for human error, and enables participants to scale their operations more effectively. Features like 24/7 pricing, multi-venue execution, and algorithmic trading tools support continuous and optimized market participation.

Reducing Market Fragmentation

By aggregating liquidity from leading exchanges and OTC providers, Liquid Mercury offers participants a consolidated view of the market, enhancing price discovery. Supporting a wide range of asset classes; including spot pairs, derivatives, futures, options, and perpetual swaps, the platform reduces the operational complexity associated with trading across fragmented venues. This consolidation facilitates more efficient trading and can lead to tighter bid-ask spreads.

Lowering Transaction Costs

Access to deep liquidity and advanced execution tools helps minimize market impact and slippage, contributing to cost-effective execution for traders. By integrating back-office functions (such as trade reporting and settlement) into trading workflows, the platform reduces operational overhead, aiding in overall cost management for participants.

Increasing Transparency

Liquid Mercury enhances visibility and accountability across the trading lifecycle through features like real-time trade monitoring, compliant trade-integrated chat, and post-trade reporting. These tools are particularly valuable in OTC markets, where transparency has traditionally been limited. Improved transparency supports better risk management and compliance efforts among market participants.

Strategic Contribution to the Ecosystem

Liquid Mercury’s role as a connector and enabler strengthens the overall infrastructure of the cryptocurrency market. By improving market efficiency, reducing operational barriers, and enhancing liquidity flow, the platform contributes to:

• Accelerating Institutional Adoption: Providing necessary tools and infrastructure supports institutions in entering the cryptocurrency trading space more confidently and efficiently.
• Creating an Integrated and Scalable Ecosystem: Liquid Mercury's solutions help build a cohesive market environment capable of handling increased participation and transaction volumes without compromising performance.
• Supporting the Professionalization of Crypto Markets: By aligning cryptocurrency trading practices more closely with those of traditional financial markets, Liquid Mercury aids in the maturation and legitimacy of the digital asset industry.

In fulfilling these roles, Liquid Mercury not only empowers its clients but also contributes to the broader evolution of the cryptocurrency trading ecosystem, positioning itself as a valuable partner for a diverse range of market participants. 

In the next section of this report, we will take a look at a practical application of Liquid Mercurys offerings by detailing a case study we did on one of their clients.

6. Client Case Study

Introduction to K33

K33 is a platform dedicated to cryptocurrency markets, research, and investment solutions. It provides tools and insights to support investors and institutions in the digital asset sector. Its services include market analytics, research publications, and investment classifications. Collaborations with companies such as Fireblocks, Coincover, and Quicknode enhance its focus on security, efficiency, and reliability. K33 aims to deliver a comprehensive approach to navigating the cryptocurrency ecosystem.

Client's Challenges and Objectives

Specific Challenges

• Legacy Tech Stack Issues: K33's in-house developed technology had substantial legacy issues, resulting in a lack of flexibility, robustness, and auditing capabilities. The system was heavily dependent on manual processes.
• Operational Inefficiencies: These challenges slowed product development and affected profitability due to high overhead costs associated with maintaining and operating the existing setup.

Objectives

• Future-Proof Trading Technology: K33 aimed to upgrade its trading infrastructure to a more flexible and robust system capable of adapting to evolving market demands.
• Streamline Operations for Scalability: The goal was to enhance operational efficiency and make the business truly scalable.

Solution Implementation

Engagement with Liquid Mercury

• Product Implemented: K33 implemented Liquid Mercury OTC as their trading solution.
• Onboarding Process: The onboarding was described as efficient and streamlined, facilitating a smooth transition to the new platform.

Customizations and Integrations

• Turnkey Solution with Identity Provision: Liquid Mercury provided a turnkey solution that included identity provision and access management, which K33 found valuable for enabling a faster rollout.
• Integration with Service Providers: Liquid Mercury accommodated K33's specific needs by integrating different service providers unique to K33 and developing required features.

Results and Benefits

• Increase in Execution Speed: K33 experienced a 10-fold or greater increase in execution speed, as the new system eliminated manual dependencies present in their old setup.
• Improvement in Operational Efficiency: The company reported approximately a 100% increase in operational efficiency, effectively doubling their operational effectiveness.

• Enhanced Efficiency and Robustness: The solution improved the efficiency and robustness of K33's trading operations.
• Increased Team Productivity: According to K33, "the team is several orders of magnitude more efficient," allowing them to focus more on strategic tasks rather than manual processes.

Client’s Experience with Liquid Mercury

• Partnership Approach: K33 described their experience with Liquid Mercury as positive, noting that the company treated them more as a partner than just a client and was motivated by K33's success.
• Service and Support: The level of service and support stood out, along with the completeness of the solution provided, which included a full-fledged white-label platform.

Recommendation

• Endorsement: K33 indicated they would recommend Liquid Mercury to other firms due to the quality of the product and the positive experience working with the team.

Testimonial

"The partnership with Liquid Mercury has been key to K33’s success as a crypto broker. After partnering with Liquid Mercury, K33 has experienced accelerated growth, increased customer satisfaction, and increased productivity. It has been a great experience working with Tony and his team, and Liquid Mercury has my warmest recommendations."

— Torbjørn Bull Jenssen, CEO of K33

‍

7. Future Outlook

As part of this report we asked Liquid Mercury for an insight as to what their future offerings will look like. The below section explores these offerings.

Upcoming Developments

Liquid Mercury is actively enhancing its platform to meet the evolving needs of the cryptocurrency trading ecosystem. The company's upcoming developments focus on expanding product capabilities to support more complex trading instruments and providing infrastructure for emerging asset classes.

Expansion of OTC Options Trading

Liquid Mercury plans to add support for options trading to its OTC platform. This enhancement will enable dealers and brokers to facilitate bilateral over-the-counter options trading through electronic RFQ and RFS mechanisms. Additionally, the platform will support the management of high-touch voice trades for options contracts. By integrating options into the OTC platform, Liquid Mercury aims to provide market participants with greater flexibility and efficiency in executing options strategies, which are essential for hedging and risk management.

Introduction of Tokenized Asset Infrastructure

The company has developed infrastructure to support tokenized assets, allowing projects to manage their primary market issuance and facilitate the trading of digital assets on regulated and OTC secondary marketplaces. This initiative includes providing the necessary tools for the creation, issuance, and management of tokenized assets while ensuring compliance with regulatory requirements. By offering tokenization capabilities, Liquid Mercury seeks to broaden the spectrum of tradable assets on its platform, opening new opportunities for investment and diversification in the digital asset space.

Enhancement of Options Execution Capabilities

Liquid Mercury is enhancing its options trading functionalities by adding advanced execution capabilities for trading complex strategies on derivatives exchanges. This includes developing a suite of algorithmic trading tools tailored for options trading and implementing a multi-venue complex order book. These enhancements are designed to assist traders in executing sophisticated options strategies across multiple exchanges efficiently, improving execution quality and access to liquidity.

Market Trends

Increasing Institutional Participation from Traditional Finance

The digital asset market is witnessing a growing influx of institutional participants from traditional finance. Banks, asset managers, and other financial institutions are increasingly entering the digital asset space, driven by client demand and the search for new investment opportunities. This trend necessitates trading solutions and workflows that are familiar to these institutions from other asset classes. They require platforms that offer:

• Institutional-Grade Features: Robust risk management tools, compliance capabilities, and advanced execution options.
• Integration with Existing Systems: Seamless connectivity with their current trading infrastructure and back-office systems.
• User-Friendly Interfaces: Platforms that mirror the usability and functionality of traditional financial systems to reduce the learning curve.

Providers like Liquid Mercury are adapting their offerings to meet these needs, ensuring that traditional financial institutions can transition into cryptocurrency trading with confidence and minimal operational disruption.

Continued Growth in Crypto Derivatives Trading

Over the last 24hrs the Total Derivatives Volume amount to $1.1 trillion, this accounts for 107 derivatives exchanges:

‍

‍

The crypto derivatives market continues to expand, with increasing trading volumes and a wider array of products such as futures, options, and perpetual swaps. This growth is driving several key needs in the market:

• Enhanced Value Propositions from Exchanges: Traders are seeking exchanges that offer competitive fees, superior liquidity, and advanced trading features to optimize their strategies.
• Efficient Management of Multiple Venues: As traders engage with exchanges across different regions and jurisdictions, there is a need for platforms that allow for centralized management of positions and orders globally.
• Robust and Resilient Trading Infrastructure: The volatility and 24/7 nature of crypto markets require infrastructure that can handle high transaction volumes and rapid market movements without compromising performance or security.

Trading technology providers are responding by developing more sophisticated platforms that address these requirements, supporting traders in navigating the complexities of the derivatives market effectively.

Emergence of Increased Sell-Side Participation

An increasing number of sell-side institutions, including banks and brokers, are entering the cryptocurrency market as intermediaries. Their participation is significant for several reasons:

• Facilitating Market Access: Sell-side firms help buy-side participants, such as hedge funds and asset managers, to navigate the crypto market efficiently by providing services like trade execution, liquidity provision, and market insights.
• Enhancing Market Efficiency: Their involvement contributes to deeper liquidity pools and tighter bid-ask spreads, improving overall market conditions.
• Offering Expertise and Support: With their experience in traditional markets, these institutions can offer valuable guidance on compliance, risk management, and best practices in trading.

The entry of established sell-side players is expected to accelerate the maturation of the cryptocurrency market, making it more accessible and appealing to institutional investors.

8. Conclusion

Liquid Mercury has positioned itself as a key facilitator in the evolution of the cryptocurrency trading ecosystem, effectively bridging the gap between traditional finance and digital assets. By providing institutional-grade infrastructure and comprehensive trading solutions, the company addresses the critical needs of professional traders, buy-side firms, and sell-side institutions, navigating the complexities of the crypto market.

The suite of products demonstrates the company's commitment to delivering advanced tools that enhance execution quality, operational efficiency, and market connectivity. The successful partnership with K33 highlights the tangible benefits clients can achieve, such as significant improvements in execution speed and operational effectiveness.

As the market continues to mature, with increasing institutional participation and the growth of crypto derivatives trading, Liquid Mercury remains at the forefront by anticipating and responding to emerging trends. Upcoming developments like the expansion of OTC options trading, the introduction of tokenized asset infrastructure, and enhanced options execution capabilities position the company to meet the evolving demands of its clients.

By serving as the connective tissue among market participants and promoting market efficiency through automation and innovation, Liquid Mercury contributes to the professionalization of the cryptocurrency industry. The company's strategic focus and adaptability not only empower its clients but also play an important role in shaping the future of digital asset trading, fostering a more integrated, efficient, and resilient trading ecosystem.

‍

‍

‍

Disclaimer: This report was created for Liquid Mercury. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.

‍

Appendices

‍

https://dune.com/hildobby/btc-etfs

‍

https://liquidmercury.com/

‍

https://dune.com/hildobby/eth-etfs

‍

https://liquidmercury.com/team/

‍

https://cointelegraph.com/news/microstrategy-42b-capital-bitcoin-purchase-michael-saylor

‍

https://www.forbes.com/sites/tonyaevans/2024/11/21/pennsylvania-passes-bitcoin-rights-bill-proposes-strategic-reserve/

‍

https://liquidmercury.com/#solutions

‍

https://liquidmercury.com/#news

‍

https://k33.com/

‍

https://liquidmercury.com/blog/

‍

https://cryptoslate.com/blackrock-supports-us-strategic-bitcoin-reserve-amid-rumors-of-executive-order/

‍