Cryptocurrency Trading Revenue Could Double Despite Market Slump, Analysts Say

Francisco Memoria
  • Cryptocurrency exchanges could see their revenue hit $4 billion this year, thanks to crypto trading fees.
  • Coinbase reportedly enjoyed nearly half of last year's $1.8 billion fee revenue pool.

Revenue generated from cryptocurrency trading fees is expected to double this year, despite the cryptocurrency market’s bearish trend, according to analysts from New York-based global asset management firm Sanford C. Bernstein.

In a report titled “Crypto Trading – the Next Big Thing is Here?”, first spotted by Bloomberg, a team of analysts led by Christian Bolu revealed the firm believes fees collected from cryptocurrency traders is still a major source of revenue.

Last year, buying and selling cryptocurrencies earned crypto exchanges $1.8 billion, the report notes, a figure that could double to as much as $4 billion this year, a notable development taking into account the market’s performance so far.

According to CryptoCompare data, most cryptocurrencies dropped from their all-time highs in mid-December to, in some cases, yearly lows. While BTC dropped from nearly $20,000 to about $6,500, Ethereum dropped from $1,300 to $300 at press time.

In their paper, the analysts wrote:

As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms.

The analysts’ estimates are based on transaction fees from available data. Per Bloomberg, only the global cash equities market surpassed cryptocurrency trading. Wall Street giants like Goldman Sachs and BlackRock have already started dipping their toes in the crypto ecosystem, but regulatory uncertainty and volatility seemingly stop them from diving.

The traditional financial sector has been proceeding cautiously when it comes to cryptocurrencies, partly because of the lack of products aimed at institutional investors. Recently the US Securities and Exchange Commission (SEC) rejected a bitcoin ETF application filed by the Winklevoss twins, and postponed its decision on the VanEck-SolidX ETF application.

According to Bernstein’s analysts, San Francisco-based cryptocurrency exchange Coinbase, whose userbase is now of over 13 million, may end up in an “unassailable competitive position” if Wall Street firms keep staying away from crypto.

Per their estimates, Coinbase has enjoyed 50 percent of the transaction revenue pool, a figure consistent with reports that revealed Coinbase exceeded revenue expectations last year, reaching a record $1 billion. As CryptoGlobe covered, Coinbase has revealed it was adding 50,000 users a day last year, although available data shows its popularity dwindled this year.

Notably Coinbase has been facing competition from various popular financial apps, including Square’s Cash app and Robinhood Crypto, which let users buy and sell cryptocurrencies. These don’t share a part of the fee revenue pool as they don’t charge users. Square, which recently moved its trading service to OTC desks, netted $400,000 off of $37 million in revenue from BTC transactions.

Travala’s Token AVA Jumps Following Announcement of Partnership with Expedia

Michael LaVere
  • Binance-backed cryptocurrency travel booking platform Travala has announced a partnership with Expedia Group.
  • Travala's native token AVA appreciated more than 20 percent following the announcement.

The Binance-backed travel booking website Travala has announced a new partnership with the online travel agency Expedia Group. 

According to a press release published July 6, Travala and Expedia have joined forces to offer consumers a frictionless cryptocurrency travel-booking experience. The release claims more than 700,000 Expedia Group hotels and accommodations have been made available via Travala.com, in addition to the platform’s existing 2 million hotels across 230 countries. 

Juan Otero, CEO and co-founder of Travala, said the new partnership reflected the rise in popularity for cryptocurrency. He also explained that consumer travel was on the rise following months of COVID-19 imposed shutdown. 

He said:

Our latest month-on-month data shows consumer confidence and the desire for travel is returning, with an 81% increase in room nights booked and website traffic up 50% week-on-week.

Binance CEO Changpeng Zhao said Travala had proven its ability “to build a world-class travel booking platform” and was excited by the partnership with Expedia. 

AVA, the native token for Travala, underwent a subsequent price increase following the announcement. As of writing, the coin has appreciated more than 20%. 

Altcoins Move up as Bitcoin Stalls

The AVA token is not the only in the cryptocurrency space growing exponentially so far this year. While the price of bitcoin has been range-bound moving between $9,000 and $10,000 since the beginning of May, various altcoins have been moving up.

Over the last 6 months, the price of BTC is up little over 13% according to CryptoCompare data, while other altcoins have been moving up. Most of these are related to the decentralized finance space, or to blockchains launching new products or announcing specific partnerships.

VeChan's VET, for example, surged after it was announced VeChain was attending the World Artificial Intelligence Conference 2020, hosted by the Shanghai Municipal People's Government. The conference will also be attended by Microsoft, Alibaba, Tencent, Huawei, and Amazon. One VET is changing hands for $0.0148, up from $0.,0055 in January.

As CryptoGlobe reported, Kyber Network's KNC tokens have risen over 650% year-to-date thanks to the upcoming Katalyst update, which will allow token holders to earn ETH rewards while participating in governance by staking their tokens. 

Another altcoin that moved up significantly is OKEx's OKB cryptocurrency. The token, which gives various advantages to the bitcoin exchange's users, is up 74% over the last six months, going from $2.78 to $5 at press time.

day_CryptoCompare_Index_OKB_USDT_231_11594045158429.pngSource: CryptoCompare

OKEx's OKB isn't tied to decentralized finance protocols, which Waves CEO Sasha Ivanov warned could be turning into the  next ICO bubble, but is instead tied to one of the leading crypto exchanges in the world. 

Decentralized finance protocol Aave has also seen the price of its LEND token surge so far this year. While in January the tokens were trading at $0.017, they are now $0.175 -- a 750% increase.

Featured Image Credit: Photo via Pixabay.com