The Last Look…

I can’t help thinking about valuations again. 

Singapore-based trading platform Crypto.com just announced its first institutional funding round that puts a chunky $20 billion price tag on the ten-year old digital asset trading venue as part of raising $400 million from Citadel Securities in a “strategic” move. This follows rival exchange Kraken’s $800 million funding round in November, that attracted a $20 billion valuation from investors including Jane Street and Oppenheimer.  

I have previously written about the similarly eye-popping valuations that prediction market operators like Kalshi and Polymarket gained and I have no doubt that they’re now even higher. The decision from the CFTC to approve the launch of perpetual futures on Kalshi in late May, together with the World Cup, will have made sure of that. The football alone reportedly added 3 million users to Kalshi’s clientele while approximately $1.2 billion worth of contracts were traded as these new markets played host to 27% of US sports betting during the tournament.

The TL;DR is that we can expect even bigger numbers to pop up soon, as the craze for perpetual futures (CME Group’s mid-June federal lawsuit that argues that perps contracts should be classified as swaps rather than futures), tokenized stocks and other assets continues. 

Great news, everyone is happy. What I don’t know is what this means for companies in FX. Equity market operators have seen their shares decline as much as 30%, the FT pointed out recently, noting that it’s tough being a securities exchange when investors can’t stop looking at these new market places as the future. Essentially, investors think that established exchange operators (many of whom also have FX platforms) are missing a trick by not doubling down on contracts like perps. Critics of the new instruments argue that they’re highly leveraged (100x, so yeah, true), carry high liquidity risk due to automatic liquidation mechanisms and don’t produce a forward curve. Still, they’re mighty popular: in 2025 some $86 trillion worth of contracts were traded across centralised exchanges such as Crypto.com and Coinbase International. 

Some equity exchanges are fighting back, for example Cboe launching continuous futures and ICE looking at oil perps via a partnership with OKX. What seems startling to me, is that in spite of all of this action in financial market infrastructure, FX is largely unaffected both in terms of valuations and activity. I do wonder whether while we collectively ponder when D2D swaps will finally migrate to electronic venues and tinker around the edges for marginal improvements, the world’s biggest market is being bypassed by bigger picture innovation.

I know that perps are mostly retail and that as the underpinning infrastructure for global financial markets wholesale FX has to be first and foremost resilient, not innovative. I understand that investors like sexy new things and boring old currencies are safe and taken for granted. I understand that sometimes solving complexity is the extremely boring and painful way to riches. But still. Much as I’m committed to workflow automation and the latest small improvements in basis point performance improvements, I can’t help but feel that perhaps some could take a slightly more bigger picture view. 

Valuations might reward such an approach. Because while FX might be less glamorous and more of an afterthought to many that trade it, it’s a hugely complex OTC market that sustains a vast ecosystem of established investors. In spite of the enormous network effect, its truly fundamental role in global trade and vast daily volumes, companies in FX have failed to garner multibillion dollar valuations (apart from Revolut) even as the market grew 88% in the last decade, according to the BIS. 

Surely, there has got to be value in there somewhere beyond squeezing a 1.5 bps spread in somehow even more.