The crypto liquidity provider market is heading for a shakeout. That is the verdict of three-quarters of institutional OTC participants surveyed by Finery Markets, a crypto liquidity network whose new annual report describes 2026 as the year when consolidation pressure becomes impossible to ignore.
Liquidity Provider Numbers Expected to Fall
Six in ten OTC market participants said they expect the number of active liquidity providers to shrink before the end of 2026, with 25% predicting an outright decrease and a further 37% forecasting a slight contraction. Only 32% of respondents expect new entrants to offset losses.
“In a market increasingly defined by scale, pricing precision, and operational efficiency, sub-scale providers may face an impending consolidation wave,” the report states.
For CFD brokers that depend on a fragmented pool of crypto liquidity providers to power their pricing engines, fewer active market makers means narrowing competitive tension on spreads, higher concentration risk in liquidity sourcing, and reduced negotiating leverage on execution quality.
B2Broker’s decision last November to plug directly into Finery Markets’ ECN for its institutional crypto OTC offering is an early example of how some firms are responding to this structural pressure.
Zodia Custody’s integration with Finery Markets, announced in April 2025, similarly reflects a broader trend of institutional players building direct connectivity into electronic liquidity networks rather than routing through traditional intermediaries.
Margin Compression Already Biting
The expected consolidation is not hypothetical. Finery Markets found that 75% of surveyed firms reported significant margin compression in 2025, with half describing their margins as having decreased and a quarter reporting a slight decrease. Just 8% said they had improved.
The firms weathering the pressure best are those investing in technology to replace human overhead. Algorithmic pricing and post-trade automation each ranked as the number one technology investment priority for 31% of surveyed participants heading into 2026.
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That pattern will be familiar to anyone who followed the retail FX industry through its own compression cycle in the 2010s. The report itself draws the parallel explicitly, describing the current OTC crypto market as mirroring the structural migration of the $9.6 trillion daily FX market toward electronic, regulated liquidity streams. X Open Hub’s expansion of its institutional crypto OTC liquidity pool earlier this year reflects that same logic applied to a CFD-facing context.
The $27 Trillion Case Against Legacy Rails
The trapped capital figure sits at the center of a broader case the report makes about stablecoin settlement. Traditional SWIFT and SEPA infrastructure, it argues, forces institutions to pre-position capital across venues days before it is needed, generating a “fragmentation tax” on every firm that cannot rebalance in real time.
“The end of trapped capital: traditional rails leave an estimated $27 trillion trapped in pre-funded accounts,” the report states. “Stablecoin-era atomic settlement (T+0) allows for just-in-time liquidity, freeing up institutional capital for immediate redeployment.”
Annual stablecoin transaction volumes now exceed $57 trillion, and stablecoins’ share of institutional OTC transaction volume grew from 23% in 2023 to 78% in 2025, according to the report. Transactions now settle in under one second for less than one cent on Ethereum and Layer 2 networks, compared with the 24-hour or longer settlement cycles common on legacy banking platforms.
FinanceMagnates.com reported in January that stablecoins are increasingly being adopted as a settlement tool at the broker level, with firms under pressure to adapt their back-office infrastructure accordingly. A separate analysis from June 2025 detailed how CFD brokers are specifically turning to stablecoins for cross-border payments, citing cost reduction and settlement speed as primary drivers.
