Crypto Market Structure Follows Foreign Exchange Playbook, Says BridgePort Chief

By Steve Bartfield, CPO

Published in johnlothiannews.com

January 08, 2026 – The cryptocurrency market’s path to institutional maturity lies in replicating the infrastructure that governs foreign exchange trading, according to Steve Bartfield, chief product officer of BridgePort, speaking at the FIA EXPO in mid-November.

Bartfield said that FX traders brought institutional practices into crypto, creating a natural blueprint for how digital asset markets should evolve. Unlike the current model, where crypto exchanges operate as monolithic entities controlling custody, collateral, trading and settlement under one roof, the future will fragment these functions—just as FX markets have done.

“If you’re looking at the playbook of where crypto is heading, the easiest way to look at it is to look at FX,” Bartfield said. “Pretty much all of these asset classes follow a very similar market structure. They all follow kind of the same S-curve of where they’re going.”

In foreign exchange, settlement is handled by CLS; custody and collateral management are managed by custodians; and exchanges operate as specialized trading venues. Crypto has yet to replicate this separation of services, creating what Bartfield called “gaps that may exist in institutional crypto.”

BridgePort, which connects exchanges with custodians, aims to address one of the most critical gaps: the “prefunding” problem. In institutional crypto, traders must post collateral separately at each exchange they use—a practice foreign to traditional finance, where central clearing houses or financial intermediaries novate transactions across multiple counterparties.

“Your counterparty is that exchange,” Bartfield said. “The only other place this really exists in all of TradFi is for retail, like forex FDMs.”

By allowing institutions to post collateral at a single custodian and allocate it digitally across multiple exchanges in real time, Bartfield said his firm enables what he calls “collateral mobility”—the ability to move capital efficiently without being trapped in dead deposits at individual venues.

AI and tokenization as accelerators

Bartfield also highlighted the emerging role of artificial intelligence in institutional crypto operations, particularly in reconciliation and data synthesis. Instead of manual phone calls and spreadsheet audits, traders can now use AI tools to parse unstructured data from Telegram chats, Google Sheets and other informal sources, isolating the information needed to resolve disputes or reconcile transactions.

Tokenization, he said, will be essential to bridging digital assets and traditional finance—but only if three conditions are met: legal clarity, credible custodians and meaningful utility. Without all three, “the whole thing kind of collapses,” Bartfield said.

BridgePort’s collaboration with Deutsche Boerse represents a step toward fixing the fragmented model. The partnership demonstrates that institutions can hold collateral at a well-established custodian and allocate it to specialized exchanges, mirroring the structure that has worked in FX for decades.

“We have a few other custodians and exchanges working with us as well to really demonstrate how you can hold your collateral in a single well-trusted custodian like Deutsche Boerse and actually allocate that out to the different exchanges,” Bartfield said.

•  •  •  •

Reposted from Source: johnlothiannews.com