Liquidity in Motion: The New Market Structure Shaking Up Alternative Assets

By Adam Cohn

Liquidity in Motion: The New Market Structure Shaking Up Alternative Assets

By Adam Cohn, VP, Head of Trading Operations, TradeStation

The alternative investment market feels like it’s powered by rocket fuel these days, with sector assets under management nearly tripling from $7.2 trillion in 2014 to currently over $20 trillion, according to Cherry Bekaert’s October 2025 U.S. Alternative Investments Market Report.

The message is clear: alternative assets are no longer slow, opaque, and relationship-driven like they were 20 years ago. Now, a structural overhaul is underway, and the alternative investment experience is happening much faster than most people realize. Why are there so many green lights on the alternatives market highway? Technology, regulation, and investor demand have become a trio of formidable factors that are rewriting how private assets are traded, priced, and accessed.

As someone who examines the nuts and bolts of the financial markets every day, I see a clear pattern. Alternatives are borrowing the best parts of public-market infrastructure while still grappling with some of the realities that set them apart. That tension, which is innovation versus structural limitation, is precisely where the story gets interesting.

Here are three things I think traders need to know:

1. Alternatives are finally getting the market structure upgrade they need

The most significant shift is simple: alternatives are, at long last, getting real infrastructure.

A good example is electronic trading platforms, which are standardizing what used to be a slow, negotiation-heavy process for alternative asset trading. We’re seeing the alternatives market moving from email chains and PDFs to workflow-driven execution, digitized settlement, and more consistent reporting. That’s an important point, as private markets are becoming operationally recognizable to anyone who trades equities or options.

Data transparency is improving, too. Better fund-level reporting, cleaner audit trails, and more frequent valuation updates are reducing information gaps that historically left investors guessing. What used to be uncharted territory for most traders now has legible maps.

Additionally, custodians and clearing providers on the back end are stepping in with institutional-grade controls like segregated custody, automated approvals, and more predictable settlement cycles, all of which make life easier for those participating.

For traders, the script is an enticing one. Alternatives are shifting from bespoke transactions to structured markets. That foundation is what makes everything else – liquidity, pricing, and access – possible.

2. Liquidity is opening up, but don’t confuse “more tradeable” with “liquid”

Yes, liquidity is improving. Secondary marketplaces are expanding. Intermediaries are offering more consistent two-sided markets. Technology is also collapsing timelines that used to stretch into months, if not longer.

But let’s pump the brakes a bit. Alternatives are not turning into public equities, as there are major variances.

Liquidity in private assets is episodic, not continuous. It remains valuation-lagged and doesn’t function in real time like the stock market. Transfer rules and operational approvals constrain liquidity further. And it remains dependent on supply/demand pockets that can disappear quickly.

Technology can accelerate execution. It can streamline processes. It can open new pathways to price discovery. What it can’t do is change the underlying economic reality of private assets. After all, by definition, private assets are less liquid.

Make no mistake, that’s not a flaw. Instead, it’s the nature of the asset class, so it’s up to traders to gauge exposure, manage expectations, and model liquidity risk accordingly.

3. Access is expanding, raising the bar for risk controls

One of the most exciting developments in the alternative investment realm is rising democratization. The market is already showing us that better tech, lower friction, and regulatory modernization are enabling more investors than ever before to gain access to alternative markets.

Even so, expanded alternative market access comes with significant responsibilities, and these three issues top the list of obligations:

Suitability standards matter. When more investors enter the market, the guardrails become more critical, not less.

Due diligence is non-negotiable. The workflows might be digital, but the risks remain analog. Understanding the asset still matters.

In this environment, the firms that prosper are the ones that expand access without lowering their standards for compliance, risk management, or operational clarity.

Where we’re headed in 2026

It’s highly encouraging to watch alternative markets evolve from “manual, slow, opaque” to “structured, digital, and increasingly tradeable.” If that sounds familiar, it should. Alternative investments are experiencing the same transformation equities underwent two decades ago, only with different guardrails and stakes.

While I don’t own a crystal ball, market watchers could expect several alternative market elements to rise in the next few years. Those include faster settlement cycles, more precise valuation data, more robust secondary markets, stronger regulatory frameworks, and tighter operational controls, to name a few.

Don’t expect alternatives to become analogous to public markets. They shouldn’t, and they are different for many reasons. Yet alternative asset markets will continue to benefit from public-market discipline, and that’s a win-win for the entire market ecosystem. As always, technology can accelerate change. But smart trading operations make the change sustainable.

Adam Cohn
VP, Head of Trading Operations
TradeStation

TradeStation is the home of those born to trade, built upon a foundation of customization and precision that is designed to allow institutional clients to execute their strategies the way they demand. We offer self-clearing and advanced order routing for equities, options, futures, and futures options through TradeStation Securities, Inc. (member of NYSE, FINRA, SIPC, NSCC, DTC, OCC, NFA & CME), along with our highly customizable award-winning trading and analysis platforms and API technologies, which enable seamless integration with other data feeds and tools. We apply our 40-plus years of experience serving clients across the world of trading with high-touch service and custom solutions helping ensure you can focus on growing your business.