ErisX's Spot Market: More Institutional Participation and Regulatory Oversight Coming to Crypto?

United States-based cryptocurrency exchange ErisX recently announced the public launch of its spot market trading, a move that takes the company a step closer to its goal of being a one-stop shop for the trading of spot and futures contracts in a regulated environment.

Beyond crypto spot market, which is what most existing crypto exchanges offer and is also what ErisX's spot trading is about, ErisX plans to launch a derivatives exchange once the U.S. Commodity Futures Trading Commission approves its application to operate both a derivatives exchange and a clearing house.

A crypto spot market would be any venue, such as exchanges, where you can instantly trade cryptocurrencies.

Trading on the ErisX spot market will work pretty much like existing exchanges like Coinbase.

These investors - which include TD Ameritrade, DRW Holdings, CBOE, TradeStation and Nasdaq, just to name a few - are interested in ErisX for a few reasons, all of which sum up to the fact that they see promise in how the crypto exchange is building a robust, transparent, integrated and regulatory-compliant market infrastructure in the crypto space.

TradeStation, an American online securities and futures brokerage company, invested in ErisX because it believes ErisX is bridging the gap between the traditional and crypto market.

"TradeStation is actively working to help bridge the gap between traditional markets and crypto markets. Our investment in ErisX supports further advances in the crypto market structure and will help bring more established players into the space. Supporting firms like ErisX, that understand regulation and markets, benefits the crypto ecosystem."

The American brokerage firm invested in ErisX because it sees the crypto exchange operator as a viable avenue to offer its customers access to the crypto market in a transparent way.

The CFTC last year reportedly requested trading data from top exchanges, following reports that the spot market might have been manipulated for gains in the futures market.

The introduction of even more advanced futures products, like the ones ErisX and Bakkt are working on, could result in more regulatory oversight of the spot exchange operators.