Bithumb Overtakes Binance as Largest Crypto Exchange According to New Report

Bithumb Overtakes Binance as Largest Crypto Exchange According to New Report
Siamak Masnavi

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):

CryptoCompare Exchange Review CCCAGG

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."

CryptoCompare November Exchange Review

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 Volume CryptoCompare Exchange Review

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