A recent study unveiled that top-tier cryptocurrency exchanges increased their market share since October 2020, in the context of lower-risk exchanges. The bitcoin bull market fueled that both retail and professional traders utilized such risk, data shows.
Per information from crypto market data provider cryptocompare.com, top-tier crypto exchange gained 13% market share from October 2020 to January 2021. In fact, it increased from 61% ($347 billion) to 74% ($1.41 trillion).
But the study — which covered over 160 exchanges — clarified the following about the market share’s proportion:
Based on the most recent ranking update, the proportion of Top-Tier exchange volume in Jan 2021 would be 88% to reflect the increase in the number of Top Tier exchanges meeting the minimum threshold – 68 in July 2020 vs 76 in current update.
Cryptocompare highlighted that exchange’s standards “improved” as regulatory requirements toughened to meet anti-money laundering (AML) compliance. Also, they praised that crypto exchanges increased their transparency in terms of data provision.
The research backs up its statement by showing that 44% of the surveyed exchanges “offer the ability to query full historical trade data via a public API endpoint.”
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In terms of security, the crypto market data provider pointed out “fewer hacks” in the last year:
20% of exchanges state that they hold more than 95% of crypto in cold wallets (vs 15% in July 2020). 1% of exchanges have been hacked in the last year (vs 4% as of July 2020). 18% of exchanges use a third party custody provider to store user assets, up from 12% in July 2020 and 9% in our Q4 2019 Benchmark.
Funds’ security was also another topic discussed within the study. According to Cryptocompare, 9% of crypto exchanges formally offer some form of insurance. Moreover, 37% of the surveyed exchanges hold a legal license to run the business.
What do you think about the study’s findings? Let us know in the comments section below.