A recent study found that top-tier cryptocurrency exchanges have increased their market share since October 2020 related to lower-risk exchanges. The bitcoin bull market has resulted in both retailers and professional traders taking advantage of this risk, data shows.
Stricter regulations have increased transparency in crypto exchanges
According to information from crypto market data provider cryptocompare.com, the premium crypto exchange gained a 13% market share from October 2020 to January 2021. In fact, it rose from 61% ($ 347 billion) to 74% ($ 1.41 trillion).
However, the study, which included over 160 exchanges, clarified the following about market share:
Based on the most recent update to the ranking, the share of top tier exchange volume in January 2021 would be 88% to reflect the increase in the number of top tier exchanges that hit the minimum threshold – 68 in July 2020 versus 76 in the current update .
Cryptocompare highlighted that the exchange’s standards have “improved” as regulatory requirements have been tightened to ensure anti-money laundering (AML) compliance. They also praised the fact that the crypto exchange increases their transparency regarding data delivery.
The study backs it up by showing that 44% of the exchanges surveyed “offer the ability to query full historical trading data through a public API endpoint”.
Seen improvements in security
In terms of security, the crypto market data provider pointed out “fewer hacks” last year:
20% of exchanges say they hold more than 95% of crypto in cold wallets (up from 15% in July 2020). 1% of exchanges were hacked last year (up from 4% in July 2020). 18% of exchanges use a third-party provider to store user assets, up from 12% in July 2020 and 9% in our benchmark for the fourth quarter of 2019.
The safety of the funds was also an issue that was discussed in the study. According to Cryptocompare, 9% of crypto exchanges officially offer some form of insurance. In addition, 37% of the exchanges surveyed have a legal license to conduct the business.
What do you think of the results of the study? Let us know in the comments below.
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