This article looks at CryptoCompare's "November 2018 Exchange Review" research report (published on 6 December 2018), and highlights some of its key findings.
The first thing to note is the title of the cover page report says "CCCAGG Exchange Review." This is because:
"CryptoCompare’s Aggregate Pricing Index (the CCCAGG) is used to calculate the best price estimation of cryptocurrency pairs traded across exchanges. It aggregates transactional data from more than 70 exchanges using a 24-hour volume weighted average for every cryptocurrency pair."
Here are the current CCCAGG constituent exchanges (sized by 24-hour volume):
Bithumb Sees BTC/KRW Overake BTC/USD as Dominant Pair
Between 7 October and the 11 November, BTC to KRW represented 50% of bitcoin's fiat trading volume, a 400% increase. This increase "stems from Korean exchange Bithumb’s spike in volumes."
The top exchange by 24-hour spot trading volume was Bithumb with an average of over $1.24 billion; in second and third place were Binance and ZB with volumes of $641 million and $512 million respectively.
So, what caused the amount of BTC to KRW trading volume to increase so much?
Bithumb saw a 284% increase in volumes from the previous average of $323 million for the Sept/Oct period. This increase in volume comes after Singapore-based BK Global Consortium bought a controlling share in the exchange in recent months, and later implemented a series of airdrop competitions, raffles, rebates, and other programs designed to incentivize non-Korean users to sign up to the exchange and trade in exchange for rewards. The dramatic effect of these incentivised trading schemes can be seen in the chart below:
Bithumb has also implemented a form of trans-fee mining for certain users (trading past a specific volume is rewarded in the form of “Bithumb Cash” at a later date.) Last month, CryptoGlobe published an article that discussed the problem of trans-fee mining models causing "fake volumes" to get reported.
Major Crypto Exchange News in November 2018
- "Bithumb partners with an American fintech company to launch a US-based securities token exchange."
- "Bitstamp announced a partnership with Cinnober, a leading provider of trading and clearing technology."
- "The SEC brings charges against the founder of decentralized exchange EtherDelta for operating an unregistered national securities exchange."
- "BitMEX launches a VC division, 'BitMEX Ventures'."
- "HuobiPro to open an office in Russia."
- "OKEx changes settlement date of BCH futures causing outrage amongst traders."
- "Coinone and Upbit go offline after an Amazon Web Services (AWS) network failure."
Crypto Exchange Insights
- "From October to November, spot volumes constituted three quarters of total market volumes on average."
- "Average futures volumes decreased 28% since last month on average, while average spot volumes remained steady."
- "Bitmex’s Perpetual Bitcoin to USD Futures volumes continue to dominate the Bitcoin to USD futures market."
- "Exchanges with taker fees represent just under 88% (5.16 billion USD) of exchange spot market volumes." With TFM exchanges representing a large part of the remaining 12%.
- "Bithumb and Upbit represent the vast majority of South Korea’s volumes, while Binance and OKEx maintain dominance in Malta."
- "On average, exchanges that offer only crypto-crypto pairs constitute approximately two thirds of the total spot trading market (~4.30 billion USD). Whereas exchanges that offer fiat to crypto pairs constitute a third of spot market volumes on average."
- "Bithumb, ZB, CoinBene, EXX and FCoin attract significantly lower daily visitors than similarly-sized exchanges (including those ranked below 100,000 on Alexa)." Notably these exchanges operate incentivised trading schemes.
- "Exchanges itBit, Coinfloor, Bitfinex and Coinbase are among those that store the highest proportion of users’ funds offline."
All Images Courtesy of CryptoCompare