Research Shows Low-Quality Exchanges Dominate Crypto Trading Volume

Bitcoinist August 22, 2019
Updated 2019/08/22 at 7:49 PM
3 Min Read

Crypto exchanges with the lowest rating still dominate the industry, according to crypto analysis and pricing data provider, CryptoCompare.

D-E Rated Crypto Exchanges Account for 64% of Trading Volume

On Wednesday, CryptoCompare published a report on crypto exchange’s activity in July. According to the research, exchanges with lower ratings accounted for about two-thirds of the trading volume last month. This may be due to the lighter know-you-customer (KYC) verification procedures, if existent at all.

The rating is based on CryptoCompare’s proprietary exchange benchmark grading. It rates platforms based on their jurisdiction, regulatory compliance, data provision quality, trade surveillance, and market quality, among others. Thus, exchanges get a double-A for the best score and an F for the poorest service.

In July, D and E rated providers accounted for a combined 64% of the total trading volume. Those rate with AA and A accounted for a combined 25%.

Thus, more crypto traders would choose exchange platforms like Bitmax, Gateio, Ethfinex, HitBTC, IDEX, Kuna, and CoinEX over counterparts like Coinbase, Bitstamp, and Poloniex.

To clarify, CryptoCompare lists far more D and E rated exchanges than AA and A ones, which might also influence the volume distribution figure.

The good news is that the trends have been changing over the last three months, and high-quality exchanges saw more activity in July than June. AA-rated exchanges saw an increase of 28.7% in trading volume while D rated ones saw a decline by 19.4%. The biggest surge in trading volume for the month was recorded by C rated exchanges. This category includes platforms like Luno, Kucoin, CoinJar, Bibox, and Coinfloor, among others.

LBank Notes Biggest Surge in Trading Volume

Trusted exchanges (AA-B) saw their aggregate volume expand by 4.4%. On the other side, volume from untrusted crypto exchanges only rose 0.7%, though the latter category dominates the market.

Untrusted crypto exchange LBank had the largest average trade sizes and the largest increase in trading volume compared to June. LBank’s average trade size was 3.7 Bitcoin while the trading volume in July was $45 billion, up 42% since June.

The Hong Kong-based platform was followed by Coinsbit and Coinbene in terms of average trade size and by OKEx and Coinbene in terms of trading volume.

What do you think of LBank’s July performance? Do you think the surge in the crypto exchange’s trading volume is somehow related to the mass demonstrations in Hong Kong?

Images via Shutterstock, Cryptocompare

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