According to the research conducted by CryptoCompare, low-quality stock exchanges dominate the crypto market in volume. Respected stock exchanges such as Binance and Coinbase have seen a significant increase in market share this year, but investors still prefer to trade on riskier platforms.
Low-quality cryptocurrency exchanges still dominated by the market
CryptoCompare’s monthly review provides stunning information about the current state of the cryptocurrency market.
The company’s review in July found that crypto traders prefer smaller and riskier stock exchanges over high-volume and regulated stock exchanges. The report, which gave stock exchanges a rating between AA and F, also found that the trading volume of some of the industry’s most reliable stock exchanges increased by 29 percent compared to June.
However, AA-rated stock exchanges such as Coinbase and Poloniex represented only 5 percent ($31 billion) of the total volume traded on the cryptocurrency exchanges in June. On the other hand, low-quality stock exchanges (those with D and F grades) represented 64 percent of the total trading volume of $316 billion in June.
Smaller stock exchanges are traded more frequently and more
Low-quality stock exchanges dominate the market not only in terms of volume of transactions but also have the largest average transaction size, the report said. LBank, Coinsbit, and CoinBene have the largest average trading size compared to other exchanges and a volume of 3.7, 1.6 and 1.1 BTC, respectively.
Looser stock exchanges are thought to be more suitable for laundering or hiding the origins of illegal funds.
On average, transactions at LBank, a D-grade stock exchange, are 15 times larger than transactions at AA-rated Coinbase. The Hong Kong-based stock market surpassed both OKEx and Binance in crypto-crypto-monthly volumes and traded more than $45 billion in June alone.
Charles Hayter, co-founder, and CEO of CryptoCompare said the company’s latest review highlighted the need for reliable data. With small, unregulated and underdeveloped stock exchanges that take more than half of the market, having the right data will help bring more regulation to the area.
The report also revealed that increased audits have hardly worked to reduce cryptocurrency volumes. Despite record levels of $73m per month, total monthly volumes at BITMEX have not been greatly affected by the CFTC investigation.