New CryptoCompare Data Shows Uneven Balance of Power: 10 Exchanges Control 60% of Trade Volume
Cryptocurrency, like their physical counterparts, use exchanges to execute trades for their sale and purchase. Exchanges across the world transact billions of dollars worth of business, but they also provide another important service, they work as a marker of industry trends. A recent report published by CryptoCompare points out some interesting facets of how the industry is faring and where it might be heading.
CryptoCompare looks to provide clear and concise information, while still offering a detailed analysis of data to help bridge the gap between digital asset and traditional financial markets.
In their monthly report, CyptoCompare discussed Cryptocurrency Exchanges. The analysis for December reviewed and detailed the major developments within its sphere. The work emphasized exchange volumes and market concentration amongst other things.
An important finding was that the market is lopsided, with over 60% spot market volumes being conducted at the top 10 exchanges. In terms of physical locations, the tiny island nation of Malta sees the most trade when one looks at sheer volume. It is followed by Hong Kong and Samoa. However, despite its dominance, it was remarkable to find that December saw Malta's trade volume decline while the other two sites had an uptick in overall international share.
CME And CBOE Losing Faith?
Of all the trade options offered fiat pairs represented about a quarter of the spot volume. Yet of those, more than half the trading was done in USD alone. While the share of fiat pairs might be low, the choice of currency is hardly surprising, given the primacy of the dollar.
Delving into future trading, the report found an encouraging increase of 6 percent. It went on to state,
BitMex XBT perpetual futures volumes increased 17.7% in December while XBTUSD futures of CME and CBOE decreased 45.5% and 48.0% respectively since November
This sort of downward thrust is seen as a loss of market trust by some. Yet is also indicative of a reason that spurred on the price spiraling down in November. As of now both CME and CBOE hold less than 5% of the total crypto futures market, combined.
Old Exchanges Hold As China Rises
Looking at stablecoins, the report found that Tether (USDT) continues its firm grip on the market with 65% of the total monthly volume in December.
The study found that the Asian markets had taken a deep interest in crypto, even though actually holding on to the asset was amongst the lowest. The top three exchanges in terms of volumes were all Chinese and were, Binance, followed by the Hong Kong-based OKEX and ZB.
While the shift towards the Asian markets is an encouraging sign as it signifies the permeation of crypto sensitivities across the globe, it must also be acknowledged that concentration of trade is something one needs to be wary of. The analysis and results of the research do show some interesting points to ponder over how the industry might progress over the coming months.