Institutional exchanges execute trades at predictable prices, enforce clear limits, withstand spikes in traffic, and protect traders from accidentally moving the market with large orders. However, a truly great exchange is determined by how it performs when the market collapses. In other words, what makes an exchange great is not how sophisticated it is on the surface, but its ability to perform when markets are turbulent.
Last year, CoinDesk released its November 2025 Exchange Benchmark, scoring 81 exchanges across governance, licensing, auditing, KYC, proof of reserves, uptime, and other metrics. This is a useful reference and shows your overall progress. The number of “top tier” exchanges has increased. More platforms are now undergoing audits and standardized due diligence questionnaires to share evidence that they actually hold the assets they claim. It’s certainly a step in the right direction.
But credentials alone don’t answer the deeper question: Will the exchange actually behave as expected when it matters?
A platform’s onboarding polish should not be confused with its ability to execute trades and process huge volumes, as should claims that it has better exchange rates than others. Our traders asked a variety of operational questions, including whether the system could handle the large number of price updates that modern trading generates, how fills are determined, and how market data is compiled and distributed. We also asked questions to help you plan for moments of extreme volatility. Can the system handle the large amount of price updates that modern markets generate? How are executions actually determined when liquidity is lost? How is market data collected and distributed under stress?
Although many argue that the current market cycle is for institutional investors, most exchanges still operate market structures designed for retail flows. These include having a matching engine that prioritizes speed over fairness, hiding order routing information (used by institutional traders to understand how their orders will be processed), leverage that disappears in moments of volatility, and a liquidation process that relies on trust and Telegram messages. It’s not institutional. It’s retail dressed up.
The recent liquidation cascade on October 10 was a reminder of how quickly stress can build up in these markets. Approximately $20 billion in leveraged positions were wiped out across exchanges within 24 hours. This type of decline can occur in any market, even traditional markets.
But at TradFi, these moments are governed by a documented and enforceable playbook. Controls such as circuit breakers, volatility bands, and formal bust rules all apply. In cryptocurrencies, these rules are often vague or missing. Decisions may feel improvised. And that’s the difference. It’s not that volatility doesn’t happen, it’s that the response isn’t always consistent or transparent.
What matters is how the exchange behaved during the event. Were user orders filled at the expected price? Were margin calls executed fairly? Was the system stable? Did the venue follow its own rules, or did it create new rules on short notice?
A good exchange is not only about how you leverage the market. It’s judged by how you handle situations when things go wrong. Stress events should not create new risks, but expose risks that already existed. The problem here is not the retail trader. The problem is an outdated market structure in the early days of cryptocurrencies that was not built to handle the scale we are seeing today. There’s a reason why all institutional markets value depth, and much of that depth actually comes from retail participation. Retail traders often bring directional flow, are less concerned with getting the absolute highest price on every trade, and are able to ride out different market conditions. These attributes actually support lower spreads and more efficient markets for everyone.
However, not all participants benefit equally. Market makers and high-frequency traders can thrive on high-frequency retail flows. But financial institutions that need to move large amounts of money don’t want to trade in $1,500 chunks. They need real depth in the market, predictable pricing, and clear rules.
So the question is not who is trading. That’s the structure of the market. When financial institutions must use systems built for small, mobile-first trading, they face additional costs and uneven risk because it’s unclear how orders line up, prices come and go, and trades don’t always fill consistently. In mature markets, exchanges control the number of price updates they can send out at once, so the price you see at the top of your screen is actually tradeable and not a temporary quote meant to give you an advantage.
It’s not about restricting retail traders. It’s about keeping the system honest. Retail traders and institutions can both grow together, but they need an infrastructure built for both. That is what makes the exchange truly systematic. The CoinDesk benchmark is a step forward. Put the data into a table. It raises the floor. And for committed market participants, this is a useful starting point. However, scorecards cannot be confused with strengthening the underlying market structure.
You can’t call something institutional just because the users are. Good interactions are boring. Transparent. Battle tested. Made to size. That’s the real benchmark. Most crypto exchanges want to be treated like organized platforms. Some companies aim to match the credibility of the exchanges and prime brokers that dominate traditional finance. But it’s the structure, not the brand, that earns that status.
The global reach that early technology leaders and crypto platforms have built is real. But it cannot be sustained without deeper investment in the infrastructure that institutional investors actually rely on: clean execution, observable credit, and predictable behavior under stress. That’s what separates a trading venue from a good exchange.
