Crypto Exchanges Leave Traditional Venues in the Dust

 

EXECUTIVE SUMMARY

In 2021, for the first time, trading revenues generated by crypto exchanges surpassed the trading and clearing revenues generated by all of the traditional exchanges in the world by a staggering 60%. Based on trading volumes and publicly available financial information, Opimas estimates that crypto exchanges earned a combined US$24.3 billion from trading fee revenues in 2021, up from US$3.4 billion in 2020, a seven-fold increase.

Despite the market’s impressive size and growth, there remains room for improvement, and with it, opportunity. Cryptocurrency exchanges still face a number of problems:

  • Substandard technology leading to exchange outages
  • Inadequate adherence to regulations coupled with poor regulatory oversight
  • Provision of multiple brokerage-like services in addition to a central marketplace

In addition to sizing up the market and exploring the opportunities still available in this fast-growing space, this report provides a comparison of the top cryptocurrency exchanges, discusses the problems that remain at leading crypto exchanges, and peeks into the future.

The space continues to shock and surprise, though Opimas expects four developments going forward:

  • The regulatory environment will gain definition
  • Volumes will continue to concentrate around a handful of top exchanges
  • Listed crypto exchanges will look for ways to smooth revenues, such as the subscription-based model
  • Weaker players are likely to disappear, leading to further consolidation of the space.

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