LMAX Exchange, which operates a foreign-exchange trading venue, is launching a cryptocurrency exchange.

The exchange is pitched at institutional investors, and LMAX said it was a response to client demand.

Banks and hedge funds will be able to buy and sell bitcoin, ether, litecoin, XRP, and bitcoin cash.

LONDON — The UK foreign-exchange trading venue LMAX Exchange is launching a cryptocurrency exchange for institutional investors.

LMAX said it developed the new "LMAX Digital" venue at the request of clients who wanted access to cryptocurrencies like bitcoin and ether. Clients will be able to trade bitcoin, ether, litecoin, XRP, and bitcoin cash on the exchange, which will operate 24 hours a day and seven days a week.

"We are furthering the legitimization of the cryptocurrency market by offering institutions a platform on which to acquire, trade, and hold cryptocurrencies securely with high quality, deep liquidity," David Mercer, the CEO of LMAX Exchange, said in a statement.

The LMAX Exchange Clipper racing yacht. Jack Taylor/Getty Images LMAX will offer cryptocurrency custodian services to clients who trade on its exchange, solving one of the major problems that have prevented institutional investors from dabbling in cryptocurrencies.

Banks and hedge funds have been reluctant to buy these new assets given the difficulties in holding and securing them.

LMAX Exchange was launched in 2010 as a multilateral trading venue for foreign exchange and has transacted over $10 trillion of fiat currency since launch.

"We've applied everything we've learned in the institutional FX market to LMAX Digital, to create a fundamentally improved, secure digital exchange based on our proven trading technology, market-leading liquidity, and transparent and precise execution," Mercer said.

The launch of LMAX Digital comes just days after JPMorgan created a new position of head of crypto strategy and weeks after Goldman Sachs signaled its intention to begin trading bitcoin-linked products. Crypto hedge funds have also been springing up, with an estimated 167 launched in 2017, according to the research firm Autonomous Next.

Crypto hedge funds have largely relied on "over the counter" market makers to purchase cryptocurrencies rather than transparent and centralized exchanges. This is because most of the crypto exchanges globally cannot handle the order sizes required without big changes in price. Startups such as B2C2, Circle, and Coinbase have emerged as leading over-the-counter brokers for institutions, but the sums involved remain small compared with other asset classes.

"The rise of institutional trading of cryptocurrencies will be a game changer for the industry," Mercer said. "We believe our new exchange will support the transformation of the crypto market from the fringes to the mainstream.

"Digital currencies are, without a doubt, coming of age. Exchanges will play a crucial role in bringing the major cryptocurrencies into wider circulation, helping them to become accepted into conventional funds which in turn will help to support a normalization of value."

LMAX Digital will be run out of London initially, but Mercer said the company's data-center infrastructure would soon be replicated in New York and Tokyo to support clients in those markets.