BDCenter Digital analysts have tracked the development trends of cryptocurrency exchanges over three years
BDCenter Digital analyzed 32 cryptocurrency exchanges between 2018 and 2020 on a number of criteria, from trading volume to customer interaction.
Study was carried out on the basis of the following parameters: trading volumes, accessibility to users, target audience, traffic sources and promotion channels, as well as interaction with the community. According to BDCenter Digital, the leading jurisdictions in terms of the number of listed exchanges are the United States and South Korea.
In 2018, the leaders in this indicator were the United States, China and Hong Kong, but only the United States retained its position in 2020. This is due to the fact that the management of many cryptocurrency platforms has decided to change jurisdiction. In March 2018, the Binance exchange moved its operations to Malta, and the Chinese exchange OKEx followed suit. Bitfinex also thought about moving to the Swiss canton of Zug, which is often referred to as the “Crypto Valley” for its loyalty to cryptocurrencies.
BDCenter Digital specialists found out that Poloniex became the most accessible exchange geographically, on which traders from 199 countries trade. On the other hand, Upbeat and Coinone are only available to South Korean citizens. Many exchanges do not serve US residents due to the specifics of US regulation. Depending on the economic environment, exchanges may regularly change the list of countries whose residents are prohibited from serving. According to the University of Cambridge, in 2018, the number of users of cryptocurrency exchanges was 35 million, while in the third quarter of 2020 their number reached 191 million. This suggests that the audience of trading floors is constantly growing, and without a gender gap. Of the 21 million people in the United States interested in Bitcoin, 43% are women.
Speaking of trading dynamics, only a few exchanges managed to increase their trading volumes in 2018, and for some it dropped significantly. The period 2019-2020 has become more favorable for cryptocurrency exchanges. During the entire study period, only bitFlyer and OKEx demonstrated stable growth in trading volumes. Huobi Global, Binance and OKex account for about 75% of the total trading volume, but only OKEx is steadily increasing both the absolute trading volume and the share in the total volume: in 2018 it was 17%, in 2019 – 21%, and in last year – 22%.
Security, as one of the defining factors of user confidence in trading platforms, directly affects their competitiveness. Despite the fact that the exchanges Kraken, Binance, KuCoin and Bithumb were previously subjected to hacker attacks, they are among the five most secure exchanges. Among the leaders is Coinbase, which is in second place in terms of reliability.
Since 2018, cryptocurrency exchanges have started to actively launch their own blockchains or tokens on the main blockchains. Today, 40% of exchanges have them. Recently, the release of their own stablecoins has become popular. So, in 2019, Binance launched the Binance USD (BUSD) stablecoin pegged to the US dollar, and Binance Coin (BNB) is already the third largest cryptocurrency market by market capitalization. Given the high level of competition, exchanges are looking to expand their functionality.
The top priority is opening a fiat gateway that provides input and output of national currencies. In 2020, a fiat gateway appeared in 72% of the reviewed exchanges, and in 2018 only 43% of sites offered this function. Margin and over-the-counter (OTC) trading is already supported by 65% of exchanges. Few exchanges provide platforms for launching and investing in cryptocurrency projects (launchpad), including Binance and KuCoin. Today, 90% of trading platforms have a mobile application. In addition to standard instruments, exchanges offer staking, cryptocurrency loans, profitable deposits, trusted custody, P2P trading, and liquidity swaps.
Analysts also mentioned the “mixed” platforms eToro and Robinhood, which, in addition to cryptocurrencies, support stocks, exchange traded funds (ETFs), contracts for differences (CFDs), foreign currencies, commodities and indices. However, such sites are much inferior to specialized exchanges in terms of cryptocurrency trading volumes, despite the “expanded” set of assets.
After analyzing the web traffic of cryptocurrency exchanges, experts came to the conclusion that 70% of the traffic of the exchange is received through direct transitions to the site, and 8% of traffic – from clicks on referral links, although in 2018 this figure was about 14%. About 13% of the traffic exchanges get from search queries, and 3.65% from social networks. The smallest share of traffic falls on screen ads – only 0.72%. The top three in terms of traffic include Robinhood, Binance, and Coinbase. All studied exchanges receive 94.42% of traffic from the Google search engine. The USA, South Korea and Japan are leading in terms of the amount of traffic supplied to cryptocurrency exchanges.
Twitter has become the most popular social network among marketplaces. Half of the exchanges publish news there more than three times a day. Less than once a day, only five exchanges publish news: bitFlyer, Bittrex, Coinbase, Coinone and Upbit. Facebook ranks second in popularity among cryptocurrency exchanges, and Instagram is in third place. YouTube video hosting is also in demand among exchanges – in 2020, 16 sites already have their own channels. Only 6 out of 32 exchanges have their own blog.
More than 65% of platforms use Telegram as their main communication channel with users. Analysts noted that most of the leaders of cryptocurrency exchanges do not engage in dialogue with the audience. The exception is Binance CEO Changpeng Zhao, who regularly posts content, communicates with users, and actively tweets the BNB coin. Co-founder of the Gemini cryptocurrency exchange Tyler Winklevoss also effectively interacts with the site’s clients, often helping them solve various technical problems.
Binance and Coinbase became the leading exchanges in terms of the number of mentions in the cryptocurrency media. By the way, Bits.media entered the TOP 10 media platforms in terms of the number of publications on cryptocurrency exchanges (1.8%).
63.7% of materials are published in English, and 8.1% in Russian, which is in second place. News stories have become the most popular genre of stories in the cryptocurrency industry (87%), with analytical articles accounting for 6.9%. More than 20% of news feeds are scandals, police raids in exchange offices, hacks and violations of the law. Given the pandemic, in 2020 the activity of exchanges in organizing events has significantly decreased, while exchanges continue to expand into new markets. For example, last year Gemini officially started working in the UK, and in January Roskomnadzor removed the blocking of the Binance website in Russia.