Diar: Crypto Exchanges 'Mark Record Year' in 2018 Bear Market

Cryptocurrency exchanges experienced a significant increase in trading volumes towards the end of 2018, according to a recent research report.

Both the number of trades and the overall trading volume increased considerably (from 2017 levels) on major cryptoasset exchanges throughout last year, Diar’s research report revealed.

Diar’s research group has predicted that spot markets in 2019 will not see as much trading activity as they experienced during 2017. Despite a likely increase in the number of digital assets available for trading worldwide.

Total trading volume of USD markets on San Francisco-based cryptocurrency exchange Coinbase increased by about 21% in 2018 (from 2017), according to Diar’s research data. The market data also shows that US-based crypto trading platform, Kraken and Hong Kong-operated Bitfinex exchange experienced increases of 192% and 50% in trading volume, respectively, during 2018 (compared to 2017).

94.4 Million Trades Facilitated By Coinbase in 2018

Significantly, Coinbase recorded a 14.1% increase in the total number of trades in 2018 (versus 2017). In 2018, the leading US-based exchange handled around 94.4 million deals, while only facilitating 82.7 million trades in 2017. In addition to analyzing cryptocurrency trading data from last year, Diar’s research team reviewed bitcoin (BTC) mining activity from 2018.

Diar’s report found that BTC mining generated over $5.8 billion in revenue during 2018. However, the data appears to show that bitcoin miners earned considerably more in the early months of last year, when cryptocurrency prices were near their all-time highs. Notably, BTC miners earned $1.2 billion in revenue during January last year, while only generating $200 million in December 2018.

GIant crypto mining equipment manufacturer, Bitmain’s mining pools and other large pools such as ViaBTC (backed by Bitmain) had controlled over 53% of the Bitcoin network’s hashrate in 2018, Diar’s researchers estimated. However, the research report noted that the same pools now only account for 39% of Bitcoin’s hashrate.

Significantly More "Unknown Miners" Contributing To Bitcoin's Hashrate

Diar’s research also shows that a larger number of relatively smaller mining pools are now involved in mining bitcoin. Should this trend continue, then it could help improve the Bitcoin network’s security as its hashrate would not be controlled by only a few dominant pools.

Diar’s report on BTC mining activity concluded: 

Unknown miners closed December having solved a whopping 22 percent of the total blocks up from 6 percent at the start of last year. 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.

In December 2018, the Diar newsletter had reported that institutional investors had increased their participation in “higher liquidity” over-the-counter (OTC) “physical” BTC markets. During 2018, Coinbase reportedly recorded a 20% increase in total bitcoin trade volumes during its OTC trading hours.