Which Kind of Crypto Exchange will Gain More Popularity in 2022?
2022-03-28 17:55:35
What Is The Most Popular Cryptocurrency Exchange
Crypto exchanges’ revenue surpassed traditional exchanges in 2021
According to a report published by financial-services consultancy Opimas, global trading revenue generated by cryptocurrency exchanges hit $24.3 billion in 2021, which was seven times from the $3.4 billion in sales recorded in 2020, surpassing the total revenue generated by traditional stock exchanges like the New York Stock Exchange and the Nasdaq for the first time ever.
It is worth noting that the traditional exchanges had revenues four times greater than crypto exchanges only a year earlier. However, the New York Stock Exchange, Nasdaq, Deutsche Borse and CME have all been left behind by crypto startups Binance and Coinbase now as the revenue at crypto exchanges last year was 60% higher than the roughly $15.2 billion brought in by traditional securities exchanges.
The biggest winner of the explosive growth in crypto trading revenues is Binance, which increased its share of total global trading volume from 49% in 2020 to 69% as it raked in an estimated $14.6 billion in trading fees last year.
Coinbase, the only major crypto exchange to be publicly traded, reported total revenue of $7.8 billion in 2021, up from $1.3 billion in 2020. The third largest crypto exchange in terms of trading volume is Kraken, advancing one place from 2020 with the same proportion of 4%. In 2020, Bitstamp was behind Kraken, but a year later, it was tied for sixth with Gate.io as FTX surpassed it. Lbank, accounting for 22% of the total global trading volume in 2020, only traded $3.99 billion last year and ranked fifth from second. Liquid disappeared from the top six while FTX, Gate.io and bitFlyer entered into the new top eight.
What kind of exchange will attract more trading?
A crypto exchange is a marketplace to buy and sell cryptocurrencies. At present, there are three main types of cryptocurrency exchanges, including centralized exchanges (CEX), decentralized exchanges (DEX) and hybrid cryptocurrency exchanges.
As Opimas’s report shows, the vast majority of crypto trades happen on centralized exchanges. Compared to the other two types, the biggest advantage of CEX is that it is easy to use and has great UI and UX. In some of them, users can even simply register with an email, after writing down a password, trading can start as soon as possible.
However, it is certain that the biggest exchanges have not only a great reputation but high trade volumes and liquidity while having stricter requirements to ensure smooth trading. Take Gate.io, the sixth largest crypto exchange in terms of trading volume last year, as an example, users are required to verify their identity through KYC process. As Gate.io may manual review some withdrawals flagged as suspicious ones by their risk management mechanism, an advanced identity verification,also known as KYC2, will be required as well.
The U.S. Securities and Exchange Commission Chairman Gary Gensler said in February that beefing up the regulations of cryptocurrency exchange will be a top priority for the agency in the months and years to come. Therefore, in 2022, more and more CEXs will intensify self-regulation.
Crypto exchanges’ revenue surpassed traditional exchanges in 2021
According to a report published by financial-services consultancy Opimas, global trading revenue generated by cryptocurrency exchanges hit $24.3 billion in 2021, which was seven times from the $3.4 billion in sales recorded in 2020, surpassing the total revenue generated by traditional stock exchanges like the New York Stock Exchange and the Nasdaq for the first time ever.
It is worth noting that the traditional exchanges had revenues four times greater than crypto exchanges only a year earlier. However, the New York Stock Exchange, Nasdaq, Deutsche Borse and CME have all been left behind by crypto startups Binance and Coinbase now as the revenue at crypto exchanges last year was 60% higher than the roughly $15.2 billion brought in by traditional securities exchanges.
The biggest winner of the explosive growth in crypto trading revenues is Binance, which increased its share of total global trading volume from 49% in 2020 to 69% as it raked in an estimated $14.6 billion in trading fees last year.
Coinbase, the only major crypto exchange to be publicly traded, reported total revenue of $7.8 billion in 2021, up from $1.3 billion in 2020. The third largest crypto exchange in terms of trading volume is Kraken, advancing one place from 2020 with the same proportion of 4%. In 2020, Bitstamp was behind Kraken, but a year later, it was tied for sixth with Gate.io as FTX surpassed it. Lbank, accounting for 22% of the total global trading volume in 2020, only traded $3.99 billion last year and ranked fifth from second. Liquid disappeared from the top six while FTX, Gate.io and bitFlyer entered into the new top eight.
What kind of exchange will attract more trading?
A crypto exchange is a marketplace to buy and sell cryptocurrencies. At present, there are three main types of cryptocurrency exchanges, including centralized exchanges (CEX), decentralized exchanges (DEX) and hybrid cryptocurrency exchanges.
As Opimas’s report shows, the vast majority of crypto trades happen on centralized exchanges. Compared to the other two types, the biggest advantage of CEX is that it is easy to use and has great UI and UX. In some of them, users can even simply register with an email, after writing down a password, trading can start as soon as possible.
However, it is certain that the biggest exchanges have not only a great reputation but high trade volumes and liquidity while having stricter requirements to ensure smooth trading. Take Gate.io, the sixth largest crypto exchange in terms of trading volume last year, as an example, users are required to verify their identity through KYC process. As Gate.io may manual review some withdrawals flagged as suspicious ones by their risk management mechanism, an advanced identity verification,also known as KYC2, will be required as well.
The U.S. Securities and Exchange Commission Chairman Gary Gensler said in February that beefing up the regulations of cryptocurrency exchange will be a top priority for the agency in the months and years to come. Therefore, in 2022, more and more CEXs will intensify self-regulation.
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