Opinion by: Arthur Azizov, founder of B2 Ventures
Transaction cost analysis (TCA) has long been crucial in equity trading. It reveals hidden costs a transaction carries and helps minimize the gap between expected and actual prices.
As crypto matures and begins to resemble traditional markets, it inherits similar execution costs: fees, spreads and slippage each time investors buy or sell. Yet execution costs in crypto are not analyzed systematically. Understanding the true cost to execute a trade remains poor. This opacity means the industry must urgently adopt TCA before market trust erodes.
Invisible costs in the crypto market
To the untrained eye, major crypto pairs appear liquid: deep order books and competitive quoted spreads. In practice, final execution prices often deviate from expected ones because of slippage. For example, an investor intending to buy 1 BTC at $90,000 could end up paying $90,900 during sudden volatility — a $900 slippage or 1% of the trade value.
This issue is not unique to crypto, but in equity markets these costs are measured and compared using TCA and best execution standards. In crypto, the real entry or exit price is hard to calculate or predict manually. TCA can break down true execution costs by quantifying bid-ask spreads, market impact and order routing fees. With proper tools, crypto transactions can be more transparent and traders can identify cost sources.
Crypto transactions can be hard to price
If it were straightforward, TCA would already be integral to crypto markets. The main obstacle is price volatility — crypto prices change by the millisecond and trade 24/7. That volatility increases execution costs because investors can simply be late to the market.
Liquidity is often low and trading fragmented across many exchanges. Platform outages or thin liquidity on some venues increase slippage. Some costs are quietly embedded in trade prices, complicating total-cost calculations. Lack of standardized, centralized data compounds the problem: unlike equities, crypto trading data is scattered across venues, making reliable aggregation and analysis difficult.
The market also lacks clear regulation or a universal definition of TCA and best execution for digital assets. As a result, portfolio performance can depend more on trade timing or venue health than on an asset manager’s skill.
Toward measurable execution
Regulators are starting to recognize these gaps. In 2025, the European Securities and Markets Authority updated standards to extend best execution considerations beyond equities to cover asset classes including foreign exchange, commodities and crypto. While this does not prescribe specific TCA metrics, it sets a precedent: execution transparency is becoming more mandatory for digital assets.
Regulation alone won’t eliminate invisible costs, but it encourages the adoption of TCA. If market participants can see real trading costs and how fees differ across exchanges, markets will become more efficient.
Advances in cloud computing, big data and machine learning are addressing data fragmentation. It is now easier and cheaper to collect large volumes of trading data and run cross-venue TCA to identify patterns and sources of cost that were previously hidden.
Widespread use of TCA would lower trading costs and improve liquidity. Volume would flow toward venues offering better execution, stimulating competition among exchanges and improving market quality.
Opinion by: Arthur Azizov, founder of B2 Ventures.
