In July 2020, analyst institute TokenInsight released a research report on cryptocurrency exchanges in the spot market in 2020 Q2, which analyzed the volume of cryptocurrency transactions, the dynamics of trading tokens and user trends in the spot market.
The report lists the three leaders in the spot market for cryptocurrencies: Binance, OKEx and ZB.com. And the report summarizes several key points about the spot market for cryptocurrencies:
- The market value of BTC accounted for more than 65% of the overall market value of cryptocurrency for a long time, and the turnover of BTC dropped to 39.9% of the total spot transaction volume in this quarter.The extremely high market proportion of BTC and its relatively low trading volume proportion produce dislocation, and its narrow fluctuation trend cannot attract funds.
- Apart from the US, Ukraine, Russia, the UK and China, which dominate the cryptocurrency market, there is no single country or region that can export 2 million quarterly visitors to exchange.
- According to BTC and NASDAQ Composite Index (IXIC) analysis, hot money may have made a small switch between the US stock market and the cryptocurrency market, but it is still hesitant to enter cryptocurrency spot trading.
- The revenue of the centralized spot exchanges is estimated to reach $472 million in this quarter, which makes exchanges still be the profit center of the industry.
Q2 2020 spot market trends
The report includes 295 spot digital assets exchanges.By comparing the spot trading volume of the whole market in Q2 of 2019 to Q2 of 2020, it is found that the total spot trading volume of this quarter has decreased to $5.44 trillion, an increase of 25% compared with the Q2 of 2019 and a decrease of 18% compared with the Q1 of 2020, indicating that the market lacks effective hot spots and imagination space.
Despite the decline in spot trading volume, centralized spot exchanges are still the industry's profit center, with an estimated revenue of $472 million for Q2 based on an average fee rate of 0.03% and 30% true volume level. According to Q2's spot trading volume ranking by centralized exchanges, the top three exchanges by market share are Binance, OKEx and ZB.com.
The current cryptocurrency spot industry is far less competitive than the derivatives industry. ZB.com, for example, a seven-year-old exchange, doesn't provide contract products. Although contract can attract a large number of traders, on the other side, because contract trading is not yet complete, ZB.com is far from contract wars, and has accumulated a strong user base in the spot trading industry. TokenInsight noted that ZB.com is expected to grow rapidly in the second half of 2020.
“Most word asset exchanges support mobile-end transactions, web-end transactions, and API transactions. Among them, web-end transactions and API (REST) transactions are counted in the exchange's main and API visits. Therefore, the popularity of the exchange's web page can roughly represent the attitude of professional users (i.e., desktop traders and API traders) towards the exchange. In other words, if an exchange has a higher number of independent visitors (UV), it means that professional users are relatively recognized by the exchange.”TokenInsight reports.
According to data from Siteprice.org and TokenInsight, the top 5 exchanges in the market in terms of daily independent visits and browsing in Q2 2020 were Coinbase Pro, OKEx, ZB and Kraken.
At the same time, TokenInsight also analyzed the regions where the key exchanges' users come from.Apart from the US, Ukraine, Russia, the UK and China, there is no single country or region that exports 2 million quarterly visitors to exchanges.In other words, these five countries are the key areas for exchanges to compete.
According to 2020 Q2 Cryptocurrency Spot Exchange Industry Report by TokenInsight, Binance, OKEx and ZB.com are in the leading position in the spot market.