The largest exchanges 10 receive as commissions about 3 million dollars per day, which means revenue of more than 1 billion dollars per year, follows from the calculations made by Bloomberg based on CoinMarketCap data on trading volumes and information on commissions on exchanges websites. For the calculations used the lowest commission.
This is a very rough estimate, since it is almost impossible to know which commissions are offered to companies close to exchanges, and what, for example, are the discounts for the most active traders. Considering the daily trading volume and the commissions mentioned, it can be said that the top 10 exchanges receive billions of dollars a year. Although the numbers are not accurate, the order of these values shows that the cryptocurrency boom allows you to earn quite real money.
“Exchanges and transaction providers have become the biggest beneficiaries in this space because they allow people to transact and operate in this growing industry. This is big business and I wouldn't be surprised if they were making hundreds of millions of dollars in revenue or perhaps even billions a year, ”said Gil Luria, analyst at DA Davidson & Co, who evaluated the revenue estimation methodology.
The Tokyo Binance and the Hong Kong OKEx account for the largest trading volume, about 1,7 billion dollars per day. If we consider that the commission is 0,2% (higher than the OKEx commission for the most active traders in the amount of 0,07%), Binance probably receives more than all the money per day.
Next on the list are Asian cryptobirds Huobi, Bitfinex, Upbit and Bithumb. Daily trading volume on each of them ranges from 600 to 1,4 billion dollars per day, the average commission is 0,3%. According to the platform for the conclusion of smart contracts Aelf, in general, Asian exchanges account for more than half of the cryptocurrency trade.
The influence of Asia on cryptocurrency trading can be explained by the mining concentration in the region from the very beginning of Bitcoin, since miners have enjoyed low electricity prices, said Aelf co-founder Juulin Chen told the agency. Other reasons include the interest of young people in the region to new technologies, the love of consumers for mobile payments, and even a developed gaming culture that stimulates virtual transactions, Chen said. According to him, the tightening of regulation in China and South Korea, which limits the work of the stock exchanges and the holding of ICO, also leads to the fact that Asian firms are forced to become global.
The popularity of Binance is remarkable given the fact that the company began operating in July of this year. It moved its headquarters to Japan from Shanghai after the Chinese government tightened its industry policy at the end of last year. The exchange can process 1,4 million orders per second, which, according to her, makes it one of the fastest exchanges on the market.
Another possible reason for the sharp increase in popularity is the simple process of client accreditation, said Chris Slaughter, co-founder of the cryptocurrency investment platform Samsa. She is also very reliable, he said.
“They do not force users to go through the process of identifying a client before the withdrawal of funds. This is a difficult process. The exchange may lose customers in the two or four hours it takes. At Binance, the entire process from starting to create an account to depositing money into an account can take less than 20 minutes, ”Slaughter said.
The South Korean stock exchange Upbit, which is now among the five largest in terms of trading volume, began operating in October. It is controlled by Dunamu Inc., which also owns the most popular Korean messenger Kakao Talk. Upbit is integrated with Kakao Talk, more than 120 cryptocurrencies are being traded on it, thanks to a partnership with the American crypto trading of Bittrex.
All exchanges are privately owned, their maximum age is only a few years. This often means that finding financial or management information is difficult. HitBTC, the tenth trading volume of the exchange, does not provide any information about who controls it or even where the company's headquarters are located. There was no answer to these questions, even when they were asked on the exchange forum. where the company was founded, even when customers asked these questions on the exchange forum. Bit-Z, WEX and EXX, included in the top 20 in terms of trading volume, also do not provide such information.
Bitfinex, one of the five largest cryptobirds, underwent a more serious test, the Commodity Futures Trading Commission sent the company's agenda in December. Potential competition from public companies and traditional financial institutions could push cryptobirds to greater transparency and even lower costs, Slaughter said.
“More traditional institutions, such as banks and funds, are likely to start buying cryptocurrency platforms at some point in order to secure a strategic foothold in the market. It's not a problem. Financial companies will go where real income from cryptocurrency business will be, ”he said.