2018 has been one of the most rough years for the digital economy. The capitalization of the global market has fallen almost 75% compared to its peak last December, and the industry continues to show instability, inconsistency in security, and many cases of ICO's identified as scams.
However, a recent study found that, despite all the aforementioned problems, the cryptocurrency markets will continue to have a large increase in trading volume in 2019, with an estimated growth of 50%. This growth would be attributed to greater a accessibility and a growing corporate and institutional adoption.
The report was conducted by the Satis Group, and offers an in-depth analysis of the current landscape of the crypto-economy, which encompasses Exchanges, OTC providers _ off-Exchange trading done directly between two parties _ and institutional custody solutions.
The study emphasizes that the two biggest areas of uncertainty in the current market are the trading (the best way to acquire or exchange digital assets) and custody (the best way to store digital assets).
According to Satis Group, the volume of cryptocurrencies traded in the United States will exceed the trading volume of corporate debt this year. And more importantly, the trend shows that the volume of cryptocurrency trading will reach 10% of the equity trading volumein the world's largest economy and home to the biggest stock market on the planet.
Currently, the volume of U.S. equities is estimated to be over $74 trillion USD, while that of digital trading is $7.3 trillion.
Hand in hand with the growth of crypto trading volume, exchange trading fees are also expected to increase. From a figure of $2.1 billion USD estimated to have been generated in exchange trading fees last year, that numer is expected to increase to more than $3 billion USD in 2018, even in spite of the bearish conditions that have persisted this year.
“Assuming blended fees based on volume of the top 20 exchanges by size, we estimate over $2.1 billion in trading fees gathered last year across global exchanges. We estimate this number to grow to well over $3 billion in 2018,” wrote Sherwin Dowlat, lead researcher of the report.
“We estimate this number (collected trading fees) to grow to well over $3 billion in 2018, aided by: 1) trading support from larger exchanges, 2) increasing institutional participation, and 3) growing retail adoption through developing inlets such as mobile apps, with fees slightly outpacing volume growth driven by higher fee regions like the U.S.”
These figures and predictions mean that although cryptocurrencies remain stagnant in a bear market, their prices will probably rise and stabilize as trading volume increases as a result of better investment venues, better custodial solutions and greater institutional and corporate interest.
By Alejandro Cortés