Cryptocurrency exchanges are competing with one another on many fronts. The total number of active users only tells part of the story. New research by CryptoCompare seems to confirm the overall trading volume across major trading platforms is decreasing as of late. Smaller exchanges note a healthy increase in volume and users to balance everything out.
Top Exchanges Struggle for Volume
Although the top exchanges will remain the kings of the industry for quite some time to come, they too face struggles in their own regard. As the cryptocurrency industry remains on very wobbly legs – both in terms of prices and active regulatory efforts – the overall interest is on the verge of waning again. To continually attract new users, something will need to change sooner rather than later. To date, the top exchanges have seemingly not come up with a viable course of action. As a result, their overall trading volume continues to decline quite steadily.
The CryptoCompare research indicates the AA-graded exchanges have lost 31.6% of their monthly trading volume in September of 2019. It is certainly true September wasn’t a spectacular month for either Bitcoin, any of the altcoins, tokens, and assets. Prices remained relatively flat for the most part barring some bearish pressure affecting the top markets now and then. No major breakthrough has occurred as of yet, and it seems unlikely that this situation will change as 2019 draws to a close.
Smaller Exchanges Step up
On the flipside, it is very interesting to see how the smaller cryptocurrency exchanges are effectively noting an increase in trading volume. This goes to show investors and speculators are moving their funds to lesser-known platforms. It is not necessarily a solid long-term strategy. Smaller exchanges pose much greater security risks to users. At the same time, they often provide a much broader range of cryptocurrencies, assets, and tokens customers can trade. It is a very tough balancing act, both for the service providers and customers alike.
The research notes that most of the volume lost by the top exchanges has made its way to these smaller platforms. The lesser-known companies note a 31.5% volume increase in September, which is very impressive. Such a month-over-month increase from August to September 2019 cannot be ignored whatsoever. Sustaining this surprising rate of growth will be a very different tale. It is very likely the funds will keep moving around between the exchanges, thus all of these statistics can look very different in a few weeks from today.
Derivatives and Futures
Other than direct cryptocurrency trading, other markets and products need to be taken into account as well. In the case of Bitcoin, there are also derivatives and futures contracts. The derivatives are primarily traded on OKEx, as this platform continues to trump Huobi in this regard. Both platforms noted a 14.9% and 7.3% decline in overall interest month-over-month, however. That is in-line with how lackluster Bitcoin’s price action has been in recent weeks.
As far as institutional-grade products are concerned, the Bitcoin futures are still not living up to expectations. CME’s volume decreased by another 18.3% in September, whereas Grayscale’s Bitcoin Trust noted a 37.5% dip in volume. Making cryptocurrencies appealing to mainstream investors is seemingly not a worthwhile venture at this time.