New CoinMarketCap (CMC) Data Shows ICOs In 2017, Exchanges In 2018 As The Latest Trend
2017 was the year of the ICO. Today, however, times have changed: the age of the ICO is over, but the age of launching your own crypto exchange might just be beginning.
That story comes from a new report by CoinMarketCap. CMC data shows a sudden surge in the number of cryptocurrency exchanges worldwide.
Have you ever wondered what data CoinMarketCap looks at behind the scenes? In our 2018 Edition of "According to CoinMarketCap", we share some never-before-seen data, and our views about the market in the long run. Read it here: https://t.co/LyfHGek7ni pic.twitter.com/dgAk1s5aMQ
— CoinMarketCap (@CoinMarketCap) November 29, 2018
The crypto community is already home to hundreds of cryptocurrency exchanges, ranging from large exchanges like Binance handling $1 billion of transactions per day to smaller, regional exchanges handling localized trading volume.
Despite the saturation of exchanges, CMC claims the number of exchanges is only growing.
“…in just this year alone, we see that the number of new exchange requests has outstripped the new cryptocurrency requests that we receive.”
In other words, CoinMarketCap gets more requests to list an exchange that it does to list a coin – which is obviously very surprising considering how easy it is to launch a coin compared to the work involved in launching an exchange.
The latest report was written by Carlyne Chan (CarlyneCMC), Global Head of Marketing at CoinMarketCap, who had this to say about the influx of cryptocurrency exchanges:
“I was just joking about this the other day, that for each time someone proposes a “partnership opportunity” with CoinMarketCap, I can auto-respond with “Which exchange do you want me to list?” and it would be the right response 90% of the time.”
Chan believes the issue is related to the decline of ICOs. The same individuals that would have launched an ICO in 2017 are launching exchanges in 2018:
“With ICOs being ever harder to raise, many have turned to starting exchanges as a way to experiment and build profitability instead. While this might be a good plan for the most part, exchange economics are very tough; judging from the number of listing requests alone, just sheer competitive pressures will make it difficult to operate an exchange on a break-even basis.”
Other Important Details From The CoinMarketCap Report
CoinMarketCap’s reports are few and far between. In fact, this November 29, 2018 report is the first and only report of 2018. You can view the full According to CoinMarketCap (2018 Edition).
The report discusses far more than just the explosion in cryptocurrency exchanges. Other relevant details from the report include:
- The total value of the crypto industry, according to CoinMarketCap, is currently $120 billion, which is the lowest price of 2018.
- CoinMarketCap claims today’s crypto bear market is not unusual: it’s an expected part of the cycle.
“If we look at the market from a five-year perspective, since CoinMarketCap started, that month above looks like a little blip. In the long run, we’re actually up quite a lot since 2013. So we like to think…It’s not all a disaster – it’s just part of a cycle.”
- CoinMarketCap admits that it has an effect on crypto prices. In 2018, CoinMarketCap delisted Korean exchanges “due to its skewing of global numbers with its ‘kimchi premium’ that nobody outside of Korea could take advantage of”. This caused markets to briefly and sharply decline.
- CoinMarketCap has noticed a surge of listing activity in the last year. “Speaking of listing, we only really hit a strong trajectory on crypto listings in the last year and a half or so. The steep increase in cryptocurrencies show that there are now more projects and more demand for secure representations of value than ever.” In other words, the rise in the number of projects seeking to get listed on CoinMarketCap is higher than ever.
- CoinMarketCap noticed some new token and blockchain project trends in 2018 that had rarely been seen before, including self-healing chains, interoperability, scalability and governance solutions, and other innovative technologies
- CoinMarketCap’s data shows that there are a roughly equal number of active and inactive exchanges; over the years, the number of inactive exchanges roughly totals the number of active exchanges today.
- The report addresses the issue of “scam exchanges with fake trading volume.” Some exchanges are being accused of manipulating trading activity to make them look busier than they actually are. In response, CoinMarketCap introduced something called Adjusted Volume earlier this year “to give our nuanced opinion about any suspicious activity that we see.”
- This “Adjusted Volume” figure tells users the pure trading volume from each exchange, but cautions users that certain numbers may be inflated. Users can be alerted of potential issues while CoinMarketCap focuses on reporting data directly from the exchange, regardless of whether that data is manipulated.
- The report also highlights the rise of scams, including more than just scams “as epic as Bitconnect or Coincheck.” Today’s biggest crypto scams include email spoofing and phishing attacks.
- The majority of visitors only check the front pages of CoinMarketCap. The total page views for the first and second pages of CoinMarketCap and the cryptocurrencies page are roughly equal to the page views of the one million-plus longtail pages across all of CoinMarketCap.
- The average CoinMarketCap visitor checked 1.7 pages a year ago. Today, the average visitor checks approximately 3 pages.
- CoinMarketCap claims their site traffic has a 90.2% correlation with the price of bitcoin. That number is ridiculously high, but it’s actually lower than it used to be: page traffic used to be 95% correlated with the price of bitcoin.