Binance Booted From Top Exchange Spot During January Lull

As total cryptocurrency trading volumes declined during January, Binance, Huobi and Bitfinex have now suffered significant month-on-month declines in volume over the last three months, according to CryptoCompare’s latest monthly Exchange Review. Indeed, following a 15% drop off in crypto trading via its platform, Binance has now been displaced as the top volume exchange according to the data aggregation site.

Taking Binance's place at the top of CrytpoCompare's volume charts is, ZB.com, the somewhat controversial China-based exchange (with an eye to following its main competitor Binance to Malta), which experienced a 6.2% increase in business, bucking the general trend of the quieter January crypto scene. ZB managed a total volume of $19.6 billion, according to CryptoCompare’s numbers, at an average daily volume of $633 million. Binance totalled $17.5 billion for the month, with OKEX around a billion behind it. 

Top Exchanges by Volume

Among the major exchanges, Huobi Pro's monthly volume slipped below the $10 billion mark for the first time since CryptoCompare began compiling the report, dropping from almost $12 billion in December to around $5.6 billion. Bitfinex, however, appears to have fared the worse in recent months, having seen close to $12 billion in volume during November, it fell to under nine in December, and lost almost half of that during January, leaving it outside of the Top 10. 

Top Exchange by Volume

In Autumn of last year, Blockchain-watchers began to call into question the volumes on ZB.com, with a CER report on the exchange's "magic volume" alleging its teams “found definite patterns of unnatural and obviously artificial trade volume performance on 10 out of the top-20 most-traded exchange’s pairs.” 

Even during January, one particular day of trading in QTUM - where the volume spiked to USDT 120 million - raised eyebrows. You can see the spike clearly on the CryptoCompare chart. 

CryptoCompare ZB QTUM spike

 

However, another contributory factor to the rise of ZB appears to be a marked downturn in trading volume for exchanges that offer fiat pairs; volumes on those exchanges decreased by 26.5% in January, while crypto-to-crypto exchange volume decreased by just 7.2% in comparison. In general, the crypto-to-crypto exchanges represent a much larger market, with at total trade of $132 billion during January compared to $37.5 billion for those offering fiat trading pairs - meaning fiat-crypto trading represented 22% of total spot volume during the month, down from 26% in December. 

BTC-currency trading volumes

Indeed, trading in Tether (USDT) - though decreasing - still dominates the crypto space as a whole, accounting for 65% of the total business across all the exchanges aggregated by CryptoCompare. Its share is up slightly on December, corresponding to a marked reduction in US dollar trading. Interest in Japanese Yen pairs rose, according to the numbers, while other options remained relatively stable. 

While Tether’s share of the entire market rose, its dominance of the Stablecoin sector took another chip. While usage of Gemini’s GUSD and Circle’s USDC appeared proportionately steady, it would appear that PAX confirmed itself as the main pretender to Tether’s throne, with another month-on-month move into it’s market share. Admittedly, it has a long way to go, as Tether still accounts for 97.6% of all stablecoin-crypto trading, but from a standing start in October, PAX now holds nigh-on 2% of the sector. 

 

Stablecoin market share

Away from the main exchanges, the interest in Decentralised options remains negligible. DEX’s account for just 0.19% of all crypto volume in January, with Ethermium remaining the number on choice, followed by WavesDEX and Open Ledger. The combined market, however, totalled just $385 million for the month. 

Neutral Dollar Stablecoin Founder Explains How to Access Shared Liquidity Pools

Matthew Branton, the Founder and Chief Technology Officer at Neutral, a smart contract-enabled platform that provides various financial instruments for the cryptocurrency industry, has predicted that stablecoins will have “a tremendous impact on the future economy.”

Branton, a computer science graduate from Lafayette College, told CryptoGlobe that stablecoins offer “access to a digital currency that can enable payments, credit, and banking services which many people don't have access to.”

According to Branton:

[Stablecoins are] innovative digital assets [that] will help lower the barriers for [major financial] applications and [they will also] help people transact in value [systems] they are familiar with, such as the USD [and other fiat currencies.]

“Cultivating Healthy Dialogue to Help Build Wider Understanding” of Stablecoin Market

In response to a question about how the traditional financial system could be upgraded (in terms of both the regulatory framework and technological infrastructure) so that it can allow users to legally acquire stablecoins and other digital assets, Branton remarked:

In order to ensure that regulation evolves in tandem with advances in financial technology (FinTech), dialogue between regulators and innovators is essential. Cultivating a healthy dialogue among fintech project [developers], stakeholders and regulators of traditional finance will help build wider understanding of the benefits of stablecoins, and in turn accelerate the creation of regulation and infrastructure that accommodates stablecoins in the global economy.

Neutral Dollar Aims to Provide “Diversified Exposure” to Investors at “Lower Risk”

When asked what unique value proposition the Neutral Dollar stablecoin offers, which may not currently be available in the cryptoasset market, and how this is supposed to be relevant and useful, Branton said:

The Neutral dollar provides diversified exposure, presenting a lower risk alternative against other stablecoins (which contrary to their name, may not exhibit stability) in the market. In addition, the Neutral Dollar functions in a way that creates an additional layer that allows for shared liquidity amongst constituents stablecoins, a property that isn't inherent in their design. Given the fragmented and nascent nature of the crypto market structure right now, this solution is particularly relevant and unique in the marketplace.

Responding to a question about the potential impact he expects his company’s line of products to have on the cryptoasset market, Branton stated:

The impact of our products is to not only give end-users a better means to invest, trade, or hedge cryptoassets, but to also facilitate liquidity and engage in better portfolio management practices through our products. In order for the digital asset space to reach its full potential, the industry needs reliable financial instruments that take us beyond the limitations of fiat currencies, while also upholding the highest standards in stability and transparency. In the longer term, we plan to explore the launch of a suite of financial products to improve market infrastructure and activity.

Digital Asset Security Is “Quite Solid”

Commenting on how we can ensure the security of our assets, including stablecoins users might acquire, since the technology used to transact in these assets is highly technical, Branton noted:

Given that collateral is on-chain and smart contract based, security is decentralized in nature and quite solid. Asset safety is still the responsibility of the end-user — crypto-storage extends beyond the case of stablecoins and Neutral Dollar itself.

He added: “Ultimately, once a Neutral Dollar token is deployed on smart contract networks, it will function completely autonomously. The math and algorithms that govern its operation will operate independently of a centralized entity and in a transparent manner, and provide continuous services on the network.”