{"id":229505,"date":"2018-03-06T07:16:46","date_gmt":"2018-03-06T05:16:46","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=229505"},"modified":"2018-03-06T07:16:46","modified_gmt":"2018-03-06T05:16:46","slug":"top-10-cryptocurrency-exchanges-earn-3-million-in-fees-each-day","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/229505\/top-10-cryptocurrency-exchanges-earn-3-million-in-fees-each-day\/","title":{"rendered":"Top 10 cryptocurrency exchanges earn $3 million in fees each day"},"content":{"rendered":"
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Digital-asset exchanges are emerging as one of the biggest winners of the cryptocurrency boom.<\/p>\n

The top 10 are generating as much $3 million in fees a day, or heading for more than $1 billion per year, according to estimates compiled by Bloomberg using trading volume reported on data tracker CoinMarketCap.com and fee information on the exchanges\u2019 websites.<\/p>\n

Fees in the lowest range of the exchanges\u2019 scale were used for the calculations.<\/p>\n

The projections are a rough estimate as it\u2019s near impossible to know what exactly the closely held firms are charging, including discounts for their most active traders.<\/p>\n

Based on daily trading volume and fees listed, annual revenue for the top 10 goes into the billions of dollars.<\/p>\n

While the numbers aren\u2019t exact, the order of magnitude shows the boom in virtual currencies is generating some very real cash.<\/p>\n

\u201cThe exchanges and transaction processors are the biggest winners in the space because they\u2019re allowing people to transact and participate in this burgeoning sector,\u201d\u00a0said Gil Luria, an equity analyst at D.A. Davidson & Co, who reviewed the methodology for the revenue estimates.<\/p>\n

\u201cThere\u2019s a big business there and it would not surprise me if they\u2019re making hundreds of millions of dollars in revenue and possibly even billions a year.\u201d<\/p>\n

Tokyo-based Binance and Hong Kong-based OKEx are handling the largest volume of trading, equal to about $1.7 billion daily.<\/p>\n

Based on fees of 0.2%, which are higher than OKEx\u2019s 0.07% for the most active traders, Binance is likely bringing in the most cash per day.<\/p>\n

Huobi, Bitfinex, Upbit and Bithumb, which are all based in Asia, come next in the ranking. They process between $600 million and $1.4 billion of trading volume and charge fees of 0.3% on average.<\/p>\n

More than half of the crypto currency trading happens in Asia-based exchanges, according to data compiled by smart contract platform Aelf.<\/p>\n

Asia\u2019s influence in crypto trading can be explained by\u00a0a concentration of cryptocurrency mining in the region from Bitcoin\u2019s early days, as miners took advantage of cheaper electricity costs, said Aelf co-founder Zhuling Chen.<\/p>\n

Other reasons include the region\u2019s young population, which adopts new technology quickly, consumers that are comfortable with mobile payments, and even a strong gaming culture, which incentivizes virtual transactions, said Chen.<\/p>\n

Tightening regulation in the region, with China and South Korea restricting trading and initial coin offerings, also means that Asian firms have been forced to become global, he said.<\/p>\n

Binance\u2019s prominence is notable considering the firm started operating in July. It shifted headquarters to Japan from Shanghai after the Chinese government tightened its grasp on the industry late last year.<\/p>\n

The firm can process 1.4 million orders per second, which it says makes it one of the fastest exchanges in the market.<\/p>\n

Its loose customer accreditation process may also explain its growth, said Chris Slaughter, co-founder of crypto investment platform Samsa. It\u2019s also very reliable, he said.<\/p>\n

\u201cThey don\u2019t make users go through the know-your-customer process until withdrawal,\u201d Slaughter said.<\/p>\n

\u201cIt\u2019s a complicated process. You can lose customers in the two or four hours that it takes. In Binance, you can go from not having an account to having funds on an account in less than 20 minutes.\u201d<\/p>\n

South Korean exchange Upbit, which is among the top five in trading volume, only started operating in October.<\/p>\n

It\u2019s controlled by Dunamu Inc, which also owns Kakao Talk, the most popular messaging app in Korea. Upbit is integrated in Kakao Talk and lists over 120 cryptocurrencies, thanks to a partnership with the US based exchange Bittrex.<\/p>\n

All of the exchanges are privately held and only a few years old, which often means it\u2019s difficult to find financial information or details on management.<\/p>\n

HitBTC, the 10th largest, doesn\u2019t provide any information on who runs it or where the firm is based, even as customers asked these questions on the exchange\u2019s forum. Bit-Z, WEX and EXX, among the 20 biggest by trading volume, are some of the others that don\u2019t provide those details either.<\/p>\n

Bitfinex, among the five biggest, has come under heavier scrutiny as the US Commodity Futures Trading Commission sent subpoenas to the company in December.<\/p>\n

Potential competition from public companies and traditional financial firms may push crypto exchanges to be more transparent and even reduce costs, said Slaughter.<\/p>\n

\u201cMore conventional businesses like banks and funds are likely to acquire crypto platforms at some point to make sure they have a strategic foothold in the market,\u201d he said.<\/p>\n

\u201cIt\u2019s a no-brainer. Financial services is where all the real business revenue in crypto is.\u201d<\/p>\n

\"\"<\/a><\/p>\n<\/div>\n

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Read: Bill Gates on what\u2019s wrong with Bitcoin and other cryptocurrencies<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Digital-asset exchanges are emerging as one of the biggest winners of the cryptocurrency boom.<\/p>\n","protected":false},"author":59,"featured_media":219467,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[5537,26],"class_list":["post-229505","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-bitcoin","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=229505"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229505\/revisions"}],"predecessor-version":[{"id":229509,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229505\/revisions\/229509"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/219467"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=229505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=229505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=229505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}