Bullish and Flow Traders partner to develop crypto market structure insights

07 September 2023

Crypto and traditional finance (TradFi) are converging. This theme is examined from the perspective of price action and market structure in the insights paper “Navigating the Convergence of Crypto and Traditional Financial Markets”, which has been co-authored by Bullish and Flow Traders.

The convergence manifests itself in various current developments and near-term opportunities, that are driven by the growth of institutional entrants, ecosystem evolution as well as the underlying economic logic of capital flows between crypto and TradFi.

Key market structure developments explored:


  • In terms of price action, Bitcoin, as a bellwether for the broader crypto complex, has become highly correlated with traditional asset classes like equities (S&P 500) and gold. Since 2020, the persistence and magnitude of these correlations have increased significantly, signalling one dimension of convergence between crypto and TradFi.


  • The recent emergence of tokenized U.S. Treasury bills on public blockchains like Ethereum sit at the heart of crypto and TradFi, which is driven by interest rate differentials and the reallocation of on-chain capital towards exposure to risk-free rates in TradFi. The upshot of these capital flows is the development of new infrastructure and organizational practices that can significantly upgrade capital efficiency and risk management for crypto participants.


  • From a product and services perspective, there has been significant growth in the number of listed crypto ETPs, with over 190 launches in the past 6 years and greater regulatory clarity expected in the US. The market is also moving towards implementing best practices in TradFi such as segregating the custody and clearing roles from exchanges and trading platforms.


  • Although ubiquitous in TradFi, crypto lacks widely adopted industry classification standards which could unlock downstream indices and products that enable institutional investors to allocate capital towards bespoke strategies and accurately benchmark their performance.

Download the report here.