Algorithmic Trading Market Size Projected to Garner USD 41.9 Billion by 2030 growing at 12.9% CAGR - Exclusive Report by Acumen Research and Consulting
According to Acumen Research & Consulting, the global Algorithmic Trading Market Size was worth USD 14.1 Billion in 2021 and is projected to be worth around USD 41.9 Billion by 2030, growing at a CAGR of 12.9% in the coming years
Algorithmic Trading Market Overview
Algorithms have become more popular in trading in recent years as technology has allowed for faster and more effective processing of large amounts of data. By analyzing vast amounts of market data and recognizing trends and patterns, algorithmic trading can assist traders in making more informed decisions. It can also assist traders in executing trades faster than is humanly possible, reducing the possibility of human error.
Algorithmic trading has some advantages, such as increased efficiency and lower transaction costs. It does, however, carry some risks, including the possibility of flash crashes and a lack of transparency and accountability, which can lead to market manipulation.
To ensure fair and transparent trading practices, various financial regulatory bodies around the world, such as the SEC in the United States, the FCA in the United Kingdom, and ASIC in Australia, heavily regulate algorithmic trading.
Algorithmic Trading Market Statistics
- Global algorithmic trading market value collected USD 14.1 Billion in 2021, with a 12.9% CAGR between 2022 and 2030
- The North American algorithmic trading market occupied over 36% share in 2021
- Asia-Pacific algorithmic trading market growth is projected to record above 13% CAGR from 2022 to 2030
- Based on solution, the cloud-based sub-segment gathered over US$ 9.7 billion in 2021
- Among type of traders, the institutional investors sub-segment covered over 35% in 2021
- The greater use of quantum computing is a key trend in the algorithmic trading market that fuels the industry demand
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Algorithmic Trading Market Dynamics
The algorithmic trading market is expected to expand in the coming years, driven by technological advancements, increased use of algorithms in financial markets, and increased demand for automation and efficiency in the trading process. In addition, algorithmic trading has also contributed to increased market liquidity by allowing traders to enter and exit positions in financial markets more quickly. Algorithmic trading can also assist traders in better risk management by identifying potential risks and taking necessary actions. However, the market faces a number of challenges, including regulatory oversight, data security, and potential market manipulation.
Algorithmic Trading Market Segmentation
The global algorithmic trading market is categorized into solution, service, deployment, trading types, type of traders, and geography.
- Based on the solution, the market is split into platforms and software tools
- By services, the classification comprises professional services and managed services
- The deployment segment is sub-segmented into cloud and on-premise
- The trading type segment covers foreign exchange (FOREX), stock markets, exchange-traded funds (ETF), bonds, cryptocurrencies, and others
- Institutional investors, long-term traders, short-term traders, and retail investors are the categorization of the type of traders
- The regional market is classified into North America, Asia-Pacific, Latin America, Europe, and the Middle East & Africa
Algorithmic Trading Market Share
The platforms sub-segment is expected to have a significant market share from 2022 to 2030, according to the algorithmic trading market forecast. However, the software services sub-segment is expected to grow at the fastest rate during the forecasted timeframe.
In terms of services, the managed services sub-segment is expected to have the fastest growth rate, while the professional services sub-segment is expected to have the largest market share.
The cloud-based deployment sub-segment grew significantly in 2021 and is expected to grow further in the years ahead, from 2022 to 2030.
The stock market dominated the market in 2021 and is expected to gain significant traction from 2022 to 2030. In terms of growth, cryptocurrencies are expected to grow rapidly in the coming years.
The institutional investor segment generated the most market revenue, while short-term investors are expected to grow at the fastest rate during the projected years of 2022 to 2030.
Algorithmic Trading Market Regional Outlook
North America is the largest market for algorithmic trading, owing to the presence of numerous financial institutions and technology firms in the region. The United States is the largest market in North America for algorithmic trading, followed by Canada.
The use of algorithmic trading has increased significantly in the United States in recent years, owing to the growth of high-frequency trading and the increasing adoption of technology in financial markets. The United States also has a large number of financial institutions that use algorithmic trading to execute trades and manage their portfolios, such as banks, investment management firms, and hedge funds.
The Asia-Pacific algorithmic trading market is rapidly expanding, driven by the increasing technology adoption in financial markets and the region's growing number of financial institutions. Countries such as China, Japan, Singapore, and Australia are driving the market.
The use of algorithmic trading in China has increased rapidly in recent years, owing to the growth of high-frequency trading and the rising technological adoption in financial markets. The country has a large number of financial institutions that use algorithmic trading to make trades and manage their portfolios, such as banks, investment management firms, and hedge funds. The Chinese government has also encouraged the development of the domestic fintech industry which has aided the growth of algorithmic trading.
Algorithmic Trading Market Players
Some prominent algorithmic trading companies covered in the industry are AlgoTrader, 63 moons technologies limited, Argo Software Tools Engineering, InfoReach, Inc., MetaQuotes Ltd., Symphony, Refinitiv, Tata Consultancy Services Limited, Kuberre Systems, Inc., and VIRTU Finance Inc.
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Mr. Frank Wilson
Acumen Research and Consulting
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