Crypto Exchanges Post ‘Record’ Trade Volumes Despite 2018 Bear Market
Research firm Diar has published a report in which data shows that cryptocurrency exchanges ended 2018 having posted “record transacting volumes.”
In the report published on January 14, the research firm reveals that major crypto exchanges witnessed increases in trades and trade volumes in 2018 compared to figures recorded in 2017.
Diar has nonetheless predicted that the crypto spot markets will see reduced numbers and volumes in 2019, lower than figures in witnessed in 2017. This scenario will play out despite the expected range of cryptocurrency trades increasing.
According to data presented by the company, U.S. exchange Coinbase saw its USD markets post a combined increase of 21 percent in trade volume in 2018 over those recorded in a year before.
Kraken and Bitfinex also experienced massive increases in trade volumes, with yearly increases at 192 percent and 50 percent for the two exchanges respectively.
Coinbase also registered a significant increase in the number of trades, posting a 14.1 percent spike from 82.7 million deals completed in 2017 to the 94.4 million recorded in 2018.
The world’s largest cryptocurrency exchange in terms of trade volume Binance saw its USD market trading volumes rise to $190 billion in 2018.
Also included in the Diar report is an analysis of the Bitcoin (BTC) mining activities for the last one year, with the research showing that bitcoin miner revenues surpassed $5.8 billion.
The overall figure aside, miners reportedly earned $1.2 billion in January alone, but month-over-month revenues declined steadily and had withered by 83 percent by the end of the year. The slump resulted in combined revenues of just $210 million in December 2018.
According to Diar, dominance in the bitcoin mining industry has seen significant shifts over the year. For instance, in early 2018, BTC mining was dominated by a few mining pools. The main competitors were pools run by ASIC manufacturer Bitmain, and ViaBTC.
BTC.com and Antpool (owned by Bitmain) and ViaBTC together controlled over 53 percent of the Bitcoin network’s hash rate. However, with dominance shifting to a host of unknown miners, the three mining pools began 2019 with a combined 39 percent control over the network’s hash power.
“Unknown miners closed December having solved a whopping 22 percent of the total blocks up from 6 percent at the start of last year.”
Per the report, the apparent shift in dominance from the so-called major mining pools to a growing number of smaller miners is good for the bitcoin network. Diar wrote in their report:
“The Bitcoin network is currently less likely to experience an attack given the fact the BTC.com controlled pools have lost dominance over the network.”
Diar also noted that Tether (USDT) is still the dominant stablecoin in the crypto market with 69 percent control and over $4 billion traded daily in 2019.
However, Coinbase/Circle backed coin USDC has seen massive uptake and now accounts for 13 percent of the market only three months after its launch.
Diar’s data suggests there could be a lull in trade volumes in the crypto spot market for 2019. However, the opposite may happen in the OTC market, which has been on the rise in the last one year.
An earlier survey by the research firm had found that an increasing number of institutional investors were shifting towards physical BTC markets for their higher liquidity.
In 2018, Coinbase is reported to have posted a 20 percent increase in its BTC trade volumes as recorded throughout OTC market hours. Meanwhile, Grayscale’s Bitcoin (BTC) Investment Trust volumes dropped by 35 percent in 2018 compared to figures witnessed in 2017.
U.S.-based cryptocurrency exchange Bittrex opened its OTC desk this week, offering Bitcoin and over 200 other crypto assets to qualified institutional investors.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.