Blockchain Investing

A report issued by Satis Group highlights the trading volume of cryptocurrencies will increase 50 percent in 2019 and will grow at a compound annual growth rate (CAGR) of 9 percent through to 2028.

While uncertainty still largely circles the cryptocurrency sector, its overall trading volume is projected to significantly increase in 2019, a new report by Satis Group shows.

The study, called Crypto Asset Market Coverage Initiation: Trading & Custody, highlights that cryptocurrency trading volume will climb 50 percent next year and will continue to grow at a compound annual growth rate (CAGR) of 9 percent until 2028.

Digital currency trading volume is also set to overtake US Corporate Debt trading volume in 2018, and is on pace to contain at least 10 percent of US Equity trading volume.

Despite the staggering growth and interest in the cryptocurrency market over the last several years, the paper noted that interested investors have two key concerns about digital currencies: how to trade and securely store them.

“While there is largely a solid market for consumer trading and custody, these products do not always meet the needs of institutional investors, whose solutions must meet higher burdens relative to security and regulatory compliance,” the report reads.

With more than 200 cryptocurrency exchanges, it can be overwhelming for investors deciding which exchange best suits their needs in terms of buying and storing crypto-assets.

That said, Satis Group’s report estimates that the 20 top exchanges are accountable for more than 75 percent of cryptocurrency trading volume.

“As the market has matured, more exchanges have opened in a number of jurisdictions. Liquidity has remained highly concentrated amongst a small fraction of operators,” says the report.

While there are countless cryptocurrency exchanges, there are two fundamental types: decentralized and centralized exchanges.

Both exchanges support fiat exchanges, which are currency deposits, and crypto-exchanges, which are only cryptocurrency-only trades. Decentralized exchanges don’t support currency exchanges, while results in centralized exchanges holding most of the cryptocurrency trading volume.

Meanwhile, the report found that bitcoin (BTC) is responsible for one-third of all cryptocurrency trading volume, followed by Tether (USDT) at 22 percent and ethereum (ETH) at 12 percent.

With BTC dominating all cryptocurrencies by carrying over 50 percent of the market capitalization weight, the report’s findings are hardly surprising—even with an increase in the number of alt-coins.

Still, it’s been a tumultuous year for the digital currency. Ever since reaching its all-time highs of just under US$20,000 in December 2017, BTC has been on a steady decline since then. The last time BTC was over the US$10,000 threshold was in early March at US$11,342.80.

As of 6:30 p.m EST on Monday (September 24), the BTC price was US$6,622.47.

The report concludes by saying while the cryptoasset space continues evolving, “the solutions that facilitate widespread trading, adoption, and investment have continued their expansion in parallel.”

Despite the crypto-sector’s long-term outlook is still bearish the report says, investments in the “ground level” remain unabated.

“With evolving understanding of the fundamentals of the market, increased regulatory certainty in the US and abroad, and fiscal policies that continue to make alternative assets more attractive, the crypto market’s underlying infrastructure is continuing its expansion,” the report says.

In sum—investors interested in the crypto space can feel encouraged by the increase in trading volume over the next year and as global governments consider taking regulations seriously.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.



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