New data compiled for CryptoCompare’s monthly exchange review has revealed a significant increase in trading volume across what it ranks as the most reliable exchanges. 

The report, which creates a monthly snapshot of cryptocurrency exchange activity across the wide-range of markets the service monitors to create its price index, also attempts to grade the various players into what it dubs its ‘Exchange Benchmarking Tool‘, ranking them from AA down to F based on accessible data. 

July saw the six sites meeting CryptoCompare’s criteria for AA-graded exchanges – Coinbase, Poloniex, Bitstamp, BitFlyer, Liquid and itBit – increase their combined trading volumes by an impressive 29%. However, that small, select group only accounted for a relatively paltry 5% ($31billion) of the total aggregate volume seen across all of the exchanges. The same story was repeated down the list, with six A-graded and 11 B-graded markets accounting for a further 19% (US$119billion) and 8% (US$47billion) respectively.

Chart showing volume by exchange grading from 2017 to July 2019AA-graded exchange see a 28.7% increase in volume compared to June

In contrast, some of the lowest ranked exchanges, those D-E graded, chalked up US$316billion between them during, accounting for 64%. That share, though impressive, represents a 20% decrease over June's number.  

As the above chart shows, the mid part of 2019 has seen a limited claiming back of volume by AA and A-graded exchange, following a general domination of volumes by lower-ranked concerns through late 2018 and earlier in the year. 

This all totals up to a 4.4% increase in total volume on Exchanges CryptoCompare ranks as “Trusted”, a label earned by being graded AA-to-B. In total, that sub-set accounts for a total of 32% of all trading. “Untrusted” exchange volume also rose in a generally busier trading month, but by a less impressive 0.7%.

Chart showing trusted exchanges 34% volume share'Trusted' exchanges claim 32% of total volume

Ranking Exchanges in a Murky Market

CryptoCompare’s grading criteria is an attempt to provide a consumer-focused insight into the Cryptocurrency Exchange space that doesn’t rely on judgement by trading volume, which the site deems to be of questionable value when incentives like competitions, airdrops and trans-fee mining can be used to inflate volumes, or data may simply not be as trustworthy as it should be. Its full criteria for creating the ranking, which can be seen in full here.

Its parameters include Geography (and regulatory requirements therein); Legal and Regulatory compliance, including KYC/AML measures and insurance against losses, its backers and business model, the management team, data provision, market surveillance, market quality and Trading Incentives.

New York-based exchange, Coinbase, currently tops the ranking, scoring highly in terms of its legal set-up, investments and market quality.

You can read the full CryptoCompare Exchange Review for August here.