2020 cryptocurrency spot trading annual report
TRANSCRIPT
2020 Cryptocurrency Spot Trading Annual Report Jan 2021
Find, Create, and Spread Value in Blockchain.TokenInsight.com [email protected]
TokenInsight Research [email protected]
RESEARCH
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Industry Voice
The competition of professional product capabilities and risk control capabilities will occur within exchanges. We can predict that the services of high-quality platforms will be improved in 2021, either in terms of contracts or spots.
Alicia Senior Partner
Yi He Co-founder & CMO
The crypto contract market is soaring in 2020, while the contract provides an indispensable hedging tools and liquidity for the entire market. As the current trading volume of the cryptocurrency derivatives market has just begun, there is still a lot of room for development in the trading volume and trading categories of the entire derivatives industry. I believe that there will be a 10 times breakthrough in the future.
Henry Wu VP
The next opportunity for the blockchain lies on its deep integration with the traditional industry, just like the early Internet do. Everything can be work together with blockchain, and the points recorded in traditional Internet companies can be converted into points supported by blockchain technology to protect the interests of users and form a new spot and derivatives trading market. Because of the integration with mainstream business, the conceptual boundary of cryptos is broken.
Although there is full of uncertainties in 2020, eventually, it’s still ran a bull market under the bitcoin’s ‘halving’ law. 2021 will be a year which traditional capital and institutions continuously joining the market, and Bitcoin will be more widely recognized then.
Omar Chen CEO
The exchanges-provided service should be high-quality, fast, and comprehensive, but the pursuit of asset differentiation is going astray. The "compliant" market is very restricted in terms of cryptocurrency listing and trading methods. The compliance and legitimacy of the exchanges will be very important in the future.
Haipo Yang Founder
A lot of money flow in from traditional institutions, increased the funds contained in the industry. At present, there are many market makers doing hedging on different platforms, and it is hard for the plunge caused by the liquidity crisis on March 12 to reoccur.
Thor Chan CEO
The regulatory trending is clear. There will be more mergers and acquisitions in 2022. Derivatives will surpass the spot, and the ecosystems will become more plentiful. Spot, leverage, contracts, options, structured financial products, fixed income products, rating agencies, etc., will become more attractive.
George Cao Founder
Overview
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Compared with 2019, the cryptocurrency market has made great improvement in 2020.
On the one hand, cryptocurrency investment products represented by Bitcoin have been further recognized by investors including those who came from traditional markets. Taking the spot market as an example, the spot trading volume of cryptocurrency increased by more than 50% to $21 trillion, while the total market value once exceeded $1 trillion in 2020, surpassing some countries’ total stock market value like Singapore, Australia, and New Zealand. The huge returns brought by cryptocurrency products have attracted a large number of institutions from traditional markets to enter the crypto market, and they have begun to include cryptocurrency as part of their portfolio.
On the other hand, various countries have begun to implement relevant regulations on cryptocurrency. With the issuance of operating licenses related to cryptocurrency, the cryptocurrency market has begun to move out of the gray zone. Although the introduction of supervision may have some impact on the market in the short term, the role of supervision in protecting investors and promoting orderly market compliance will bring more positive effects, such as further development and improvement of the cryptocurrency market in the future.
Undoubtedly, DeFi and derivatives are the rising stars in the cryptocurrency market in 2020. After the outbreak of DeFi in the third quarter, the volume of some decentralized exchanges (DEX) has been compared favorably with centralized exchanges. DeFi’s market share in spot has expanded from less than 0.01% to 1 % in just one year, and it is still in rapid expansion. We look forward to DeFi bringing more surprises to investors in 2021.
The derivatives market has even surpassed the spot market in some indicators. In 2020H2, the futures market has a higher trading volume than the spot market. Meanwhile, in the top exchanges such as Binance, Huobi, OKEx, etc., spot trading volume is no longer dominant.
In 2020, there was a certain decline in the scale of exchanges-based token trading volume. However, from the changes in the price and trading volume of the exchanges-based token, it can be found that the price is closely related to the market position of the exchanges. The exchanges-based token’s price of large exchanges have all achieved an increase to some extent, while for smaller exchanges, even in the bull market started from 2020Q4, the price of the platform currency still rose weakly, and even dropped compared with the beginning of the year.
We expect that the trading volume of spot and derivatives will have substantial growth in the future. The performance of Ethereum and Bitcoin in 2021 is also very optimistic, besides, due to the increase in trading volume, the revenue of trading platforms will inevitably increase, which will eventually be reflected in the price of the exchanges-based token, so we are also optimistic about its performance in 2021. 2021 will be a year for the development of projects with more users and applications. Institutions cannot drive the bull market forever, and the real bull market must rely on projects, retail investors, and spots, while derivatives will increase bull’s impact by leveraging.
For more informations about the spot market in 2020, Please Enjoy the Report.
Wayne, TokenInsight COO [email protected]
2021.01.20
Co
ntent
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RESEARCH
4
Executive Summary 5
Industry Update 6
Industry Landscape 7
Trading 8
Market Volume Dynamics
Trading Volume Dynamics on CEX
Trading Conclusion
Exchanges Token Dynamics 18
Volume and Price
Exchanges Token Analysis
Users and Popularity 20
User Source Analysis
Community and Search Interest
Keywords Searching Analysis
Regulation Dynamics 24
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March Highest
Affected by the market crash on March 12, March is the month with the highest spot trading volume in 2020, which is $2,489B.
95%DeFi began to rise in late June 2020. Trading volume of decentralized exchanges in 20H2 accounted for 95% of the whole year. The annual trading volume of some decentralized exchanges has been compare favorably with some high-ranking centralized exchanges.
$21 Trillion
In 2020, the spot trading volume of cryptocurrency exceeded $ 21 trillion US dollars, an increase of 53% compared with 2019. In Q4, due to the influence of the skyrocketing Bitcoin price, spot transaction continued to increase, the spot trading volume and Bitcoin price illustrates a strong positive correlation (0.78).
KeywordsAlmost all users searching for mainstream exchanges, except those searching for ‘BitMax’, will find the keyword ‘Binance’. Some hot search words on exchanges also reveals the exchanges's possible customer acquisition direction. Taking large-scale exchanges as examples, Binance’s hot searched words include places such as ‘Argentina’ and ‘the United States’, while Huobi includes ‘Turkish’ and ‘Italian’ and OKEx has a large number of ‘Korean’ included in searches.
Executive Summary
1.71XThe whole-market spot trading volume in 2020 is 1.71 times that of derivatives, but the trading volume of derivatives in the top3 exchanges far exceeds that of spot trading.
StrictIn 2020, governments have paid more attention on cryptocurrency market regulation. The compliance of the cryptocurrency exchanges is valued by government agencies such as the SEC. Hence, centralized exchanges are paying more attention to compliance.
$250BIn 2020, the overall spot trading volume of exchanges-based token is about $250B, accounting for 1.19% of the total spot trading volume.
Binance ranked first in spot trading volume with $1 trillion annually, and the trading volume gap with the second and third highest exchanges in 2020 is particularly widening.
Top
The dominance of the Bitcoin trading market has weakened in 2020. The annual spot bitcoin trading volume accounted for 44% of the total market spot, and only 31% in Q3.
Weak
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INDUSTRY UPDATE
① OKEx COO Andy Cheung resigned from OKEx and founded the blockchain consulting company BitWork.
② Binance launches C2C trading function.
③ Loopring launched decentralized exchanges based on Ethereum ZK Rollup technology.
④ More information leaked in Mt.Gox liquidation: Bitcoin and BCH will be returned to debtors, while BSV and other cryptos will be sold.
⑤ Bitfinex launched Fulgur Alpha, a $280 million cryptocurrency hedge fund.
① Binance announced the acquisition of CoinMarketCap for $400 million.
② Following BitMEX, Deribit stopped providing services to Japanese users.
③ Bitfinex applied for a subpoena to the U.S. court, seeking to recover the $850 million in customer funds that had been seized.
④ Huobi Global announced that the HT destruction cycle will remain "monthly".
⑤ Angelina Kwan, former COO of BitMEX, joined Deribit's investor board.
⑥ bitFlyer reported a net loss of $7 million in 2019.
① KuCoin was hacked, and the private key of the hot wallet was leaked, resulting in the theft of $281m. The stolen funds were frozen by multiple platforms and $140 million was recovered.
② ZB experienced data anomalies in mid-September and was down for 48 hours.
③ Coinbase announced that Marc Andreessen, a partner of American venture capital firm a16z, and Gokul Rajaram, an executive of Door Dash, have joined Coinbase’s board of directors.
④ South Korea’s third-largest cryptocurrency exchanges, Coinbit, was seized and investigated by South Korean police for allegedly increasing trading volume and manipulating market prices.
⑤ OKCoin Japan launched spot trading services on August 20 and launched the first batch of spot trading pairs in 4 currencies including BTC.
① Huobi Innovation Lab has established a 5 million USDT ‘Polkadot Ecosystem Support Fund’, which covers its technology, community, and content creation spending.
② Binance CEO Changpeng Zhao responded to the "Tai Chi" strategy to circumvent US regulation: it was not created by Binance employees.
③ Coinbase hired former Facebook executives as the head of investor relations.
④ Binance closed the South Korea station, which had only been in operation for eight months.
⑤ Heco, the Huobi ecosystem chain’s mainnet is officially launched.
⑥ OSL is licensed by the Hong Kong Securities Regulatory Commission, offering BTC, ETH, and selected securities tokens trading.
Q1Q2
Q3
Q4
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INDUSTRY LANDSCAPESpot Derivatives
DEX
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TRADING 1. Trading Volume Dynamics Throughout 2020, TokenInsight studied and included more than 300 crypto spot exchanges. Due to the instability and questionable authenticity of data collected from some small exchanges, and also some exchanges show abnormal trading volume, the actual number of exchanges in this report is 295, including 279 centralized exchanges and 16 decentralized exchanges, which is to conduct more comprehensive and accurate research on the industry.
Cryptocurrency spot market experienced turmoil in 2020, the annual trading volume reaches $ 21 trillion, increasing 52.69% compared with 2019.
In 2020, the total spot trading volume of cryptocurrencies reaches $21,083B, an increase of 52.69% compared with 2019 ($13,807B). The correlation between spot trading volume and Bitcoin price varies greatly with a correlation coefficient of 0.02 throughout the year, a decrease of 0.76 from 2019 (0.78).
‣ 2020 annual spot trading volume and BTC price Source: TokenInsight
Q4
Q3
Q2
Q1
$3,500B $7,000B
$1,641B
$4,351B
$4,550B
$3,265B
$6,647B
$5,441B
$3,998B
$4,998B
2020 2019
‣ Whole market spot trading volume in each quarter of 2020Source: TokenInsight
$10,500
$17,000
$23,500
$30,000
$28B���������
$56B���������
$84B���������
$112B���������
$140B���������
2020/1/1 2020/2/16 2020/4/2 2020/5/18 2020/7/3 2020/8/18 2020/10/3 2020/11/18 2020/12/31
Daily�Volume BTC�Price
2020
2019
$11,000B $22,000B
$13,807B
$21,083B
‣ Spot trading volume in 2019 and 2020 Source: TokenInsight
In terms of spot trading volume, market trading volume are most active in 2020Q1. Under the influence of the “black swan” on March 12, the quarterly trading volume reached $6,647B. In 2020Q3, due to a period of sideways in the Bitcoin price, market trading activity was relatively sluggish, and the quarterly trading volume only reached $3,398B. At the same time, the rise of DeFi in 2020Q3 impacted the dominant position of Bitcoin spot on centralized exchanges. With the Bitcoin booming in 2020Q4, the trading volume in 2020Q4 rewarmed and reached $4,998B, a 25% increase compared to Q3 and a 53% year-on-year increase from the 2019Q4.
The market crash on March 12 greatly affected the correlation between spot trading volume and bitcoin prices. In 2020Q2, the spot trading volume and bitcoin prices showed a negative correlation (-0.17). However, since the 2020Q3, the strong Bitcoin price bulling trend has led to an increase in their correlation, which reached 0.61 and 0.78 in 2020Q3 and 2020Q4 respectively.
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Spot trading volume is affected by Bitcoin price fluctuations, meanwhile, Bitcoin and Nasdaq Composite Index (^IXIC) maintain a strong positive correlation (0.83) throughout the year.
In 2020, March is the most active month in the spot market, with monthly trading volume reaching $2,489B. In the other months, the trading volume in February, May and December all exceeded $2,000B. Bitcoin price volatility is one of the main factors driving the spot trading volume. In the months when the trading volume exceeded $2,000B, the volatility of Bitcoin price volatility remained at a high level, the standard deviation of Bitcoin price in December and March reached $3,125B and $1,375B respectively. In addition, in June (standard deviation: $192B), the lowest volatility of Bitcoin in the whole year, the spot trading volume was just $1,040B.
The spot market showed a clear downward trend in trading volume in the first three quarters. Months with higher spot trading volume were concentrated in the first half of the year, at the same time, the spot market in 2020 did not grow as much as the derivatives market. The trading volume of the derivatives market maintained an upward trend throughout the year, especially in 2020Q4. Funds gradually flow from the spot market to the derivatives market in 2020.
Meanwhile, the entry of institutions led to a strong increase in the price of Bitcoin in 2020Q4, and the market consensus on “BTC as digital gold” has increased. But for the whole year of 2020, the correlation between Bitcoin price and the Nasdaq Composite Index maintained a strong positive correlation (0.83), with a negative correlation between it and gold in 2020Q4, and the correlation coefficient of Bitcoin and gold for the whole year was just 0.52. Compared with gold, the price of Bitcoin in 2020 still has a stronger correlation with the US stocks.
However, the correlation between spot and Nasdaq trading volume in 2020 is low (-0.007), and the inter-quarterly correlations are quite different, with both positive and negative correlations appearing. In 2020, the correlation of liquidity between the secondary market of US stocks and the overall secondary market of cryptocurrency is lower.
‣ 2020 spot trading volume of the whole market and BTC price Source: TokenInsight
2020
Mar
2020
Feb
2020
May
2020
Dec
2020
Apr
2020
Jan
2020
Nov
2020
Aug
2020
Sep
2020
Oct
2020
June
2020
July
$650
B
$1,30
0B
$1,95
0B
$2,60
0B
$1,037.8B
$1,040.1B
$1,201.0B
$1,450.2B
$1,509.6B
$1,700.2B
$1,706.0B
$2,017.8B
$2,096.9B
$2,382.9B
$2,451.0B
$2,489.0B
Monthly�Volume
Annual correlation coefficient between Nasdaq composite
index and BTC price: 0.83��Annual correlation coefficient between gold price and BTC
price: 0.52 Annual correlation coefficient between Nasdaq trading volume and spot trading
volume:�-0.007
$50B
$100B
$150B
$200B
$6,000
$12,000
$18,000
$24,000
$30,000
2020/1/2 2020/2/19 2020/4/3 2020/5/20 2020/7/7 2020/8/20 2020/10/6 2020/11/192020/12/30
Spot�Volume�(R) BTC�price�index�(L) ^IXIC�(L)^IXIC�Volume�(trend) Gold�Price�(trend)
‣ 2020 Monthly Volume Ranking Source: TokenInsight
TRADING
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TRADING DeFi booms in 2020, driving the rise of trading volume on decentralized exchanges (DEX), and the proportion of spot trading on DEX continued to rise from 2020Q2.
The rise of DeFi in late June has become one of the biggest highlights of the industry in 2020. The volume of decentralized exchanges achieved a qualitative leap in 2020. Meanwhile, the current decentralized exchanges is dominated by automated market makers (AMM) spot trading volume, and the proportion of decentralized spot trading volume in the annual has been broken up.
In 2020H2, the proportion of trading volume on decentralized exchanges increased from 0.2% of spot trading volume from centralized exchanges (CEX) on July 1 to 3% in mid-September, and remained above 1% for most of December. It is worth noting that, this proportion was only about 0.01% at the beginning of 2020.�
‣ Proportion of spot trading volume on CEX and DEX in the second half of 2020 Source: TokenInsight
0%
1%
2%
2%
3%
$47B
$93B
$140B
1/1 2/9 3/20 4/28 6/6 7/15 8/23 10/1 11/9 12/18
DEX�Volume�Proportion CEX�trading�volume
$15B
$30B
$45B
$60B
$4.2B$4.5$7.2B$12.2B
$18.6B
$30.7$38.0
$55.0B
Liquid Uniswap V2 Poloniex Curve Gemini Sushiswap Tokenlon Balancer
DEX spot trading volume in 2020H2 is $90.6B, 17.6 times that of the first half ($5.1B). The top DEXes represented by AMM has developed rapidly. After the expansion 2020H2, the trading volume of some platforms such as Uniswap V2 are comparable to that of centralized exchanges: Uniswap V2 has a total trading volume of $38B in the second half of 2020. The volume is ranked between Liquid and Poloniex. Curve comes in second, with a trading volume of $18.6B, which is higher than Gemini.
‣ Comparison of trading volume between the top 5 DEXes and CEXes Source: Debank, TokenInsight
First�Half5%
Second�Half95%
‣ 2020 DEX spot trading volume Source: TokenInsight
‣ Proportion of DEX trading volume in 2020 Source: TokenInsight
CEX99.48%
DEX0.52%
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Bitcoin's annual trading volume reached $9,335B, accounting for 44.3% of the total spot trading volume. In 2020, its dominant position in the spot market has weakened.
In 2020, the annual trading volume of Bitcoin spot reached $9,335B, with the highest trading volume in the first quarter, reaching $4,208B. The spot trading volume of Bitcoin in the third quarter was the lowest in the whole year, at only $1,256B. Although the strong increase in the price of bitcoin in 2020Q4 caused the spot trading volume to pick up, it was still slightly lower than the trading volume in the first half of the year.
‣ 2020 BTC quarterly spot trading volume Source: TokenInsight
From the perspective of the proportion of Bitcoin spot trading volume, the dominant position of the Bitcoin market declined in 2020. The proportion of Bitcoin spot trading volume decreased from 63.3% of the total market spot trading volume in the first quarter to 33.3% in 2020Q4, and among them, the proportion of the second and third quarters declined the most, with 22.8% and 9.1% respectively.
‣ Bitcoin trading volume as a percentage of spot trading volume in 2020 Source: TokenInsight
63.3%Q1
40.5%Q2
31.4%Q3 Q4
33.3%
$1,250B
$2,500B
$3,750B
$5,000B
Q1 Q2 Q3 Q4
$1,665.2B$1,255.5B$2,206.0B
$4,208.3B
On the one hand, the weakening of the dominance of the Bitcoin spot market can be attributed to the popularity of DeFi in the second half of 2020, some DeFi assets achieved excess returns and attract much more capital inflow, especially in the third quarter. On the other hand, although the surge in 2020Q4 has slightly increased Bitcoin’s dominance in the spot market, this factor has a stronger impact on the contract market than the spot market, and the Bitcoin spot market has been impacted by the contract market to a certain extent.
TRADING
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2. Trading Volume Dynamics in CEXes
2.1 Overview
In 2020, the trading volume from centralized spot exchanges is $20 trillion, and the estimated fee income reached $1.8B.
Throughout 2020, the spot trading volume from the market-wide centralized exchanges is reported to be $20,268B, an increase of 47% compared to 2019
($13,786B). With calculating on the basis of an average fee of 3‱ and a real volume of 30%, the fee income is estimated $1.824B. The increase in trading volume is accompanied by the intensification of industry competition. Binance, the exchanges with the highest spot trading volume throughout the year, has a trading volume of $965B, which is 1.881 times that of Huobi ($514B), which ranks second1.
‣ 2020 annual spot trading volume ranking of centralized exchanges�Source: TokenInsight, *Activity such as transaction mining have a certain impact on the TI fake volume research model
‣ 2020 CEX spot volume and confidence interval Source: TokenInsight
$1,75
0B$3
,500B
$5,25
0B$7
,000B
Q1 Q2 Q3 Q4
ChangeTotal�Volume
4,621
3,730
5,513
6,404
‣ Spot trading volume of centralized exchanges in each quarter of 2020Source: TokenInsight
Confidence
30%
Confidence
50%
Confidence
70%
Reported Vo
lume
22,00
0
$20,268B
$14,188B
$10,134B
$6,080B
Binance
Huobi�Global
OKEx
BitZ
Digi nex
ZB
HitBTC
Coinbase�Pro
Kraken
BitMax
Bit nex
Bitstamp
Liquid
Poloniex
Kucoin
Gate.io
Gemini
$240B $480B $720B $960B $1,200B
$4
$10
$3
$12
$7
$10
$3
$2
$107
$99
$77
$221
$166
$16
$137
$12.25B
$22.80B
$28.72B
$30.68B
$55.01B
$65.87B
$69.09B
$77.21B
$102.56B
$199.16B
$219.16B
$285.37B
$321.93B
$338.67B
$433.35B
$513.69B
$964.52B
TI-adjusted�volumeunadjusted�volume
1After adjustment based on TI's trading volume model. The statistical scope only including the exchanges covered by TI's trading volume monitoring.
‣ 2020 Q4 top 20 spot volume (unadjusted) Source: TokenInsight
BinanceHuobi�Global
BitZOKExHitBTC
Coinbase�ProDigi nex
ZBKrakenBit nexBitstamp
MXCLiquidBitMaxPoloniexGate.ioKucoinCoinEx
Bittrex�GlobalGemini
$200B $400B
$4.73B
$5.95B
$7.19B
$7.99B
$8.12B
$11.25B
$17.42B
$17.97B
$26.93B
$29.43B
$32.48B
$41.59B
$75.27B
$75.43B
$89.06B
$98.41B
$139.76B
$169.44B
$205.65B
$455.10B
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ExchangesQ1�($B)
Q2�($B)
Q3�($B)
Q4�($B)
2020�($B)
Binance 141.58 151.08 270.73 401.12 964.52
Huobi 101.27 100.41 139.89 172.11 513.69
OKEx 92.05 98.09 129.77 113.43 433.35
BitZ 79.45 60.12 59.94 139.16 338.67
Digifinex 88.06 88.64 75.95 69.28 321.93
ZB 87.60 92.13 43.71 61.92 285.37
HitBTC 57.44 46.89 49.85 64.97 219.16
Coinbase�Pro 29.32 27.39 53.39 89.06 199.16
Kraken 19.31 19.50 22.16 41.59 102.56
BitMax 16.45 27.85 15.02 17.89 77.21
Total 712.54 712.10 860.41 1,170.56 3,455.61
‣ Exchanges with top10 spot trading volume quarter performance Source: TokenInsight
‣ Market share of top10 exchanges in spot trading volume Source: TokenInsight
In 2020, the top10 spot exchanges accounted for 16% of the market. Although spot trading competition is fierce between exchanges, Binance, Huobi, and OKEx have maintained their trading volume in the top3 in each quarters. At the same time, Binance and Kraken keep growing throughout the year. The exchanges with the highest average quarterly growth in 2020 are Coinbase, Binance and Bitstamp, with growth rates of 52%, 45% and 38% respectively.
‣ 2020 market share of key exchanges (in terms of trading volume) Source: TokenInsight
Coinbase
Binance
Bitstamp
30% 60%
38%
45%
52%
‣ Exchanges with top3 average quarterly growth in 2020 Source: TokenInsight
Others84%
Top1016%
Spot
2%
3%
5%
Binance
Huobi�Global
OKEx Bit
Z
Digi nex ZB
HitBTC
Coinbase�Pro
Kraken
BitMax
0.38%0.51%0.98%1.08%1.41%1.59%1.67%
2.14%2.53%
4.76%
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2.2 Performance of Key Exchanges
In the second half of 2020, the top3 exchanges (in terms of trading volume) presented a more stable competitive landscape, and key exchanges had a fixed daily trading volume ranking since 2020Q4.
In order to eliminate the interference of fake trading volume on data statistics and analyze the trading trends of the industry's main platforms, TokenInsight Research screened exchanges through the following measurement standards:
① The exchanges rank among the top 10 in annual turnover or the top 5 in average quarterly growth rate.
② The TokenInsight annual exchanges rating of the exchanges must be above B.
③ In the results of TokenInsight's volume monitoring, at least three out of the four quarters of the spot exchanges in 2020 have an average real trading volume higher than 80% and the real trading volume ratio has always been maintained at more than 60%.
④ This exchanges should have provided public APIs that can be used to trace back the transaction history.
Finally, 6 spot exchanges passed the screening, and these exchanges will be the focus of this quarterly report, including Binance, Huobi Global, OKEx, Coinbase Pro, Kraken, Bitstamp.
The quarterly spot trading volume of the aforementioned exchanges for the full year of 2020 is shown in the figure below.
‣ 2020 spot trading volume performance of key exchanges (unadjusted volume) Source: TokenInsight
$2,333M
$4,667M
$7,000M
$9,333M
$11,667M
$14,000M
1/1 2/3 3/7 4/9 5/12 6/14 7/23 8/25 9/28 10/31 12/3 12/31
Binance Huobi OKEx Coinbase Kraken Bitstamp
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From the daily trading volume of key exchanges, we can find that in 2020H1, the top3 exchanges (Binance, Huobi and OKEx) had fierce competition: the difference in trading volume between the three exchanges in January is small, and Huobi’s spot trading volume in February surpassed Binance on multiple dates. Meanwhile, the trading volume of the three exchanges in the first quarter was much higher than Coinbase, Kraken and Bitstamp.
However, since the second quarter, Coinbase has narrowed the gap between its daily trading volume and the top three exchanges, and the market share of Coinbase among key exchanges has increased from 5% in the first quarter to 9% in 2020Q4. In the second half of the year, its surpassed OKEx and Huobi in several dates. While Binance began to widen the gap with Huobi and OKEx since the second half of 2020. In 2020Q4, trading volume on Binance even exceeded the sum of Huobi and OKEx.
In conclusion, Binance, Huobi, and OKEx compete fiercely in the first half of 2020, but Binance gave full play to its market position in the second half of 2020 and seize a large market share. and exchanges which is holding British and American licenses such as Coinbase and Kraken was benefited from overseas institutions entering the market in Q4, the trading volume on them grew rapidly, catching up with OKEx and Huobi. In 2020H2, the competitive landscape was relatively stable, with a fixed ranking of daily trading volume in 2020Q4.
Fake trading volume has decreased, and industry concentration has increased.
At the same time, by comparing the market-wide spot trading volume and the daily trading volume trends of key exchanges that account for a larger and more authentic trading volume, we can find that the trading volume trends of key exchanges in 2020H2 and the market-wide spot trading volume trends are more coincide. This means that the market will gradually wash away the noise, the problem of fake trading volume have been improved, and the exchanges that rely on “fake volume" are slowly being eliminated by the market in 2020. Combining the growth in trading volume of Coinbase, Binance, and Bitstamp in 2020, it can be seen that large exchanges with traffic advantages and exchanges with compliance licenses will be the main force for future spot trading competition and growth.
‣ 2020 Spot exchanges and market-wide trading volume trends (unadjusted)�Source: TokenInsight
‣ Proportion of key exchanges’ quarterly volume in 2020 Source: TokenInsight
2%3%5%
19%
30%
42%
BinanceHuobiOKExCoinbaseKrakenBitstamp
Q1
Q23%4%7%
32%
20%35%
Q3 2%3%7%
22%
23%
42%
Q43%4%
9%15%
22%
48%
$0B
$35B
$70B
$105B
$140B
$8B$17B$25B$33B$42B$50B
1/1 2/7 3/15 4/21 5/28 7/10 8/16 9/23 10/30 12/6 12/31
CEX�spot�volume Key�exchanges�spot�volume
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Among the top3 exchanges in term of trading volume, the proportion of derivatives far exceeds the market average.
In 2020, the trading volume of crypto derivatives in the whole market was reported to be $12,412B, and the spot trading volume was 1.71 times that of derivatives. But the top3 exchanges (Binance, Huobi, and OKEx) have only 0.50, 0.24, and 0.37 of the ratio, which is much lower than the market average. This shows that the top3 exchanges have focus more on the derivatives business than the market average. Of the other exchanges, only Kraken has derivatives business, but its annual derivatives trading volume is just 24% of the spot.
‣ Top3 exchanges (in terms of volume) spot/derivative ratio in 2020 Source: TokenInsight
Spot
Derivat
ives
$11,000B $22,000B
$12,314B
$21,083B
‣ 2020 Total spot and derivatives volume Source: TokenInsight
1.71x
‣ 2020 Spot/Derivatives Ratio Source: TokenInsight Spot Derivatives
0.50x
Spot Derivatives
0.24x
SpotDerivatives
0.37x
Binance�Binance�Futures
Huobi�Huobi�Futures
OKEx�OKEx�(Futures)
From a quarterly perspective, the strong rise in Bitcoin prices in 2020Q4 led to the highest trading volume ratio of derivatives/spots in 2020Q4 among the top3 exchanges (3.34 times). Binance's derivatives trading volume surpassed Huobi ($848B) in 2020Q4 ($1,170B), leaping to the top of the list of derivatives trading volume. The quarter-to-quarter growth rate of up to 142% brought its derivatives/spot ratio to 2.57 in 2020Q4. In 2020Q4, the growth of Huobi derivatives volume (63%) was not as good as that of Binance (142%) and OKEx (131%).Hence it’s market share was squeezed, and the ratio of derivatives/spot trading volume also declined.
‣ Ratio of top3 exchanges derivatives/spot trading volume in 2020 Source: TokenInsight
2X
4X
6X4.69
4.12
2.571.76
5.20
1.58 1.57
4.32
1.94
2.903.55
1.33
Q1 Q2 Q3 Q4
Binance Huobi OKEx
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3. Conclusion Throughout 2020, the cryptocurrency spot trading market has experienced turbulence. The market crash on March 12 caused a severe blow to market confidence, and the sideways price of Bitcoin in the middle of the year caused the market to become deserted. But at the same time, the outbreak of DeFi at the end of June injected vitality into the market, and the entry of traditional institutions and the rise in Bitcoin prices in 2020Q4 brought an influx of funds to the market. The cryptocurrency market swept away from the downturn in 2019 and started a bull market in the last few months of 2020.
As the most important factor affecting spot trading activity and market sentiment, the price of Bitcoin has fluctuated sharply this year. Against the background of the spread of the Covid-19 pandemic in the first quarter and the soaring global economic uncertainty, along with the meltdown of U.S. stocks, the price of Bitcoin plummeted from more than $10,000 in February to below $5,000. Subsequently, although the Bitcoin price was restored in April and May, it fell into a sideways movement in June and early July. In October, the entry of traditional institutions drove the skyrocketing price of Bitcoin. The price of Bitcoin continued to soar in 2020Q4, and finally closed at a price of more than 28,000 US dollars, an increase of as much as 160% in three months.
The volume of spot trading showed a high degree of correlation with Bitcoin prices in 2020Q4. Following the continuous contraction in the first three quarters, the market was encouraged by the skyrocketing Bitcoin, trading volume continued to rise during 2020Q4. At the same time, the problem of fake trading volume was alleviated in 2020, and "fake volume" can no longer become a means of competition for exchanges. Moreover, large exchanges and exchanges holding licenses in either UK or US have demonstrated their competitiveness in the fluctuating market conditions and achieved market expansion.
Except for the 3/12 plunge, institutional admissions, and Bitcoin's skyrocketing, one of the most eye-catching industry hotspots in 2020 is undoubtedly, DeFi. DeFi achieved a qualitative breakthrough in 2020. The trading volume of AMM-based decentralized exchanges (DEX) continues to surge, from less than 0.01% of the spot trading volume of centralized exchanges at the beginning of the year to more than 1% at the end of the year. At the same time, multiple DeFi assets achieved skyrocketing in 2020, driving the trading enthusiasm of the cryptocurrency market. DeFi not only contributes to trading volume, but also brings countless innovations and future development possibilities to the industry.
However, it is worth noting that, as a relatively mature market in cryptocurrency trading, the growth of the spot market was not performed as good as the derivatives market in 2020. The sharp rise in Bitcoin in 2020Q4 had a particularly strong impact on the derivatives market, making the quarterly trading volume of derivatives surpassed the spot for the first time.
As of 2021, under the tone that Bitcoin prices continue to hit new highs at the beginning of the year, cryptocurrency are expected to continue the bull market at the end of 2020. While the development of DeFi impacts centralized spot trading, it will also contribute to the mobilization of overall spot trading activity.
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Except for BNB and HBTC, both the price and trading volume of exchanges token either shrunk or running in the spot in 2020. Moreover, in 2020Q4, the price increase of bitcoin exceeds that of mainstream exchanges token.
1. Exchanges Token Volume and Price Trends In 2020, the overall spot trading volume of exchanges token is about $250B, accounting for 1.19% of the total market spot trading volume. The highest quarterly trading volume occurred in the first quarter while Q3 had the lowest volume.�
‣ Mainstream exchanges token trading volume in each quarter of 2020Source: TokenInsight
EXCHANGES TOKEN DYNAMICS
Q1Q2Q3Q4
$16B $32B $48B $64B $80B
BNB HT OKB KCS ZB ZT HBC
Compared with mainstream cryptocurrencies, with the exception of Binance's BNB and HBTC (added to the market in 2020H2), after the "312" event of 2020Q1, the prices and trading volume of other exchanges token have shrunk significantly or stagnated. Although BNB was hit in Q1, it still achieved weak growth in Q2. However, the cryptocurrency bull market that began in Q3 pushed up the price and trading volume of BNB. In Q4, BNB trading volume has accounted for 64.8% of the mainstream cryptocurrency trading volume, close to two-thirds, and its quarterly average price has reached 29.818 US dollars, much higher than others.
‣ 2020 Exchanges tokens’ quarterly average pricesSource: TokenInsight
Exchanges�Token
Exchanges 20Q1 20Q2 20Q3 20Q4
BNB Binance 17.323 16.070 21.720 29.818OKB OKEx 4.149 5.018 5.587 5.435HT Huobi�Global 3.684 4.023 4.549 4.153HBC HBTC N/A N/A 3.403 3.067KCS KuCoin 1.134 0.938 1.038 0.826ZB ZB 0.265 0.231 0.262 0.267ZT ZBG 0.046 0.052 0.047 0.051
1.19%
‣ Percentage of exchanges token volume in total volume Source: TokenInsight
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2. Exchanges Token Analysis The "312" event was the true turn in the performance of the exchanges tokens throughout the year. Before March, they performed much better than Bitcoin. Among them, OKB issued by the OKEx platform increased by 150% compared with the beginning of January, which was the best performance. However, after the "312" incident, affected by market panic, the prices of mainstream exchanges tokens drop together with mainstream cryptocurrencies, and some of their price even lower than in early January. Although the market gradually recovered in Q2 and Q3, the performance of exchanges token began to diverge since then.
The large exchanges tokens represented by BNB, OKB, and HT performed well after the turbulence in the middle of the year. Their yearly gain has been higher than that of Bitcoin did and closely followed the bull market. Throughout the year, although their performance was not as good as Bitcoin, both BNB and OKB reached the highest level at the end of the year, up nearly 200% compared to the beginning of the year. in contrast, HT performed relatively flat in Q4, with a stable annual growth rate of 50%, but still better than KCS, ZB, and other exchanges tokens.
However, other mainstream exchanges tokens performed disappointingly after the "312" incident. Most of their performance was inferior to mainstream exchanges tokens, and some exchanges even fall below their initial prices. The reason is the market consensus is concentrated on exchanges with more risk management capabilities. Behind the stability and rise of their prices, investors affirm the value of the exchanges they represent. For smaller exchanges, with lacking market consensus, so even if their exchanges tokens enter a bull market in the second half of the year, the price of their exchanges tokens will be more difficult to rise.
‣ Mainstream exchanges token and Bitcoin price trends in 2020 Source: TokenInsight
-50%
0%
50%
100%
150%
200%
250%
300%
1/1 3/2 5/1 6/30 8/29 10/28 12/27
BNB HBC HT KCS OKB ZB BTC�Price
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1. Users’ Source Analysis The source of search volume reflects a certain extent the distribution of exchanges users and the macroeconomic situation of user groups. TokenInsight uses Google Trends search interest which greater than 10 as the threshold, and conducts statistics on the distribution of user search volume for the top 12 large spot exchanges by volume and 3 emerging exchanges that perform well in 2020. The results show that 43.8% of user searches come from developing countries/regions, while over half of user searches come from developed countries/regions.
From the perspective of exchanges, there is a significant gap in the source of search volume among users of different exchanges. Exchanges headquartered in major developed countries/regions, such as Coinbase, Kraken, Bitstamp, BitZ, etc, almost all of their search volume comes from developed countries/regions. Bitfinex, Binance, and other exchanges have a relatively wide and diverse source of users. Huobi, HitBTC, CoinEx, and other exchanges are mostly searched in developing countries/regions, especially CoinEx, all the search volume comes from developing countries/regions.
The different regional sources of user search volume may be related to the market expansion strategies of different exchanges. Taking large spot exchanges as an example, Coinbase focuses on the European and American markets, while Binance and CoinEx take globalization as their development keynote. In the long run, these will all be reflected in the source of user search volume.
‣ Source of exchanges visits (In terms of developed/developing country/region) Source: Google Trends. TokenInsight
USERS AND POPULARITY
Bit nexBinance
Coinbase�ProHitBTCBitMaxHBTCHuobiKrakenOKEx
Digi nexBitZ
CoinExZB
Gate.ioBitstamp
15 30 45 60
2
3
3
7
4
4
10
4
7
11
8
28
28
34
2
3
6
4
5
9
6
12
19
2
25
26
Developing�Country/RegionDeveloped�Country/Region
56.3%
43.8%
Developing�Country/Region Developed�Country/Region
Note: The number in the figure represented the number of countries. the figure only shows the distribution of search volume from corresponding countries, reflecting the wide range of users. The more countries with search interest greater than 10, the higher the exchanges’s ranking, but it does not mean that the overall search volume is high.
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From an intercontinental perspective, in 2020, the regions that are keener to search for cryptocurrency exchanges are concentrated in Europe, Southeast Asia, and the Middle East, especially in Europe. Among the sources of exchanges search volume, the search interest of European countries reached more than 10 for about 125 times, accounting for 46%, followed by Southeast Asia and the Middle East, accounting for 12.1% and 11.0% respectively.
‣ Distribution of exchanges-related search interest in 2020Source: Google Trends, TokenInsight
But while going deep into the country/region perspective, there is something different. In 2020, among the major cryptocurrency exchanges searches, the most frequently appeared source in South Korea, followed by Hong Kong and Singapore, both located in East Asia and Southeast Asia. Taking into account the important positions of Hong Kong SAR and Singapore in the foreign exchanges trading and cryptocurrency market, the influence of investors from the Asian region in the cryptocurrency market has become increasingly prominent.
‣ Distribution of search interest by region in 2020 Source: Google Trends, TokenInsight
1.8%
2.6%
4.4%
5.1%
6.6%
10.3%
11.0%
12.1%
46.0%
EuropeSoutheast�AsiaMiddle�EastEast�AsiaLatin�AmericaSouth�AsiaAfricaNorth�AmericaOceania
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-4.5%
0.0%
4.5%
9.0%
13.5%
18.0%
1�Million
2�Million
Binance Kraken Bitstamp KuCoin Poloniex OKEx Coinbase�Pro Huobi�Global
20Q1�Followers 20Q2�Followers Q2�QoQ 20Q3�Followers Q3�QoQ 20Q4�Followers Q4�QoQ
2. Community and Search Interest Cryptocurrency market have performed well in 2020, and the number of exchanges’ followers from various social platforms has increased. In the whole year, Binance has more than 1.4 million Twitter followers, with the average quarterly growth reaches 9.8%. Binance, OKEx and Huobi Global's followers in Q4 increased by more than 30% in compared to Q1. Among them, Huobi Global had the highest 34% increase. It is worth noting that in the annual statistics, the growth of Bitstamp and Poloniex’s followers is not obvious, especially Bitstamp, which is only increased by 1.6%.
‣ Twitter followers of each exchanges in 2020Source: Twitter, TokenInsight
0
17
33
50
67
83
100
2020/1/12 2020/3/22 2020/5/31 2020/8/9 2020/10/18 2020/12/27
Binance� Bit nex� Bitstamp� Coinbase�Pro� Coinex� Huobi� Kraken� OKEx�
From the perspective of search interest, the search heat of exchanges fluctuates throughout the year, but during the large-scale market turbulence in March, the DeFi boom in 20Q3 and the bull market at the end of 2020, the search heat of each exchanges has risen overall.
‣ Year-round search interest of exchanges in 2020 Source: Google Trends, TokenInsight
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3. Keywords Searching Analysis
Binance is the most searched keyword among all exchanges in 2020, and search interests on different exchanges reveal the direction of future customer acquisition.
Related keyword search analysis is an effective means to understand the development direction of each exchanges and user preferences. TokenInsight produced the following keyword distribution map based on relevant topics that users of major exchanges and emerging exchanges pay attention to in 2020.
‣ Distribution of keywords that users of each exchanges pay attention to in 2020 Source: Google Trends, TokenInsight
It is worth noting that almost all users searching for mainstream exchanges, except those searching for BitMax, will find the keyword Binance. The related search keywords of BitMax and HitBTC are mainly in Japanese, while other exchanges rarely show related search keywords in Japanese, which shows the important position of the two exchanges in the Japanese market. Besides, some hot search words on exchanges also revealed the exchanges' possible customer acquisition direction. Taking several large exchanges as examples, Binance’s hot search terms include information such as Argentina and Binance US, Huobi includes related words such as Turkey and Italy, and OKEx has a large number of Korean search hot words.
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REGULATION DYNAMICS
Latest�News
• In March 2020, CFTC, the top regulator of financial derivatives in the United States, clarified the parameters used for physical delivery of cryptocurrency.
• On July 24, 2020, U.S. regulators allowed banks to hold cryptocurrency.
• On September 15, 2020, the 49 U.S. states and the capital of Washington will unify the regulatory framework to simplify the compliance work of cryptocurrency companies.
• On September 29, 2020, the US Securities and Exchanges Commission (SEC) stated that it would not impose sanctions on digital security exchanges that comply with existing regulations.
• In October 2020, the US Department of Justice accused BitMEX and its executives of violating the Bank Secrecy Act.
• On October 9, 2020, the U.S. Attorney General issued a cryptocurrency enforcement framework.
• On July 31, 2020, Russian President Putin signed a law to regulate cryptocurrency.
• On July 10, 2020, the Anti-Money Laundering Financial Action Task Force (FATF) issued a review report on the implementation of revised standards for cryptocurrency and their service providers on stable currency-related anti-money laundering and anti-terrorist financing issues.
• On August 24, 2020, the UK regulator plans to extend financial crime reporting obligations to cryptocurrency trading providers.
• On October 7, 2020, the British financial regulator banned the sale of crypto derivatives to individual investors.
• In March 2020, South Korea promulgated the "Reporting and Use of Specific Financial Transaction Information Act" to amend the law to allow the application of AML and CFT rules to cryptocurrency exchanges.
• In April 2020, Japan implemented an amendment bill that requires two KYC documents to be submitted when opening an account on a cryptocurrency exchanges.
• In January 2020, the Financial Services Agency of Japan: To conduct cryptocurrency derivatives trading volume, registration applications must be made in advance.
USA
Russia
FATF
UK
Korea
Japan
The report is based on public sources considered to be reliable, but TokenInsight Inc. does not guarantee
the accuracy or completeness of any information contained herein. The report had been prepared for
informative purposes only and does not constitute an offer or a recommendation to purchase, hold, or sell
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