The evolution of crypto exchange
strategies 2018-2020

BDC Consulting is a company that helps fintech & blockchain startups grow and scale faster. We work with ambitious projects and leaders who are defining the future of the digital economy.

Back in 2018, as the ICO format was rapidly losing its popularity, we conducted our first study of cryptocurrency exchanges, which were attracting more and more market players thanks to their high profitability.

We analyzed dozens of exchanges by criteria such as availability, website features, target audience, traffic sources, marketing channels, affiliate programs, and community management.
The present study is a continuation of our original research. Our key objective was to understand how crypto exchange activity has evolved by the end of 2020.
The three largest exchanges account for 75% of the total trading volume, though only OKex has succeeded in increasing both its absolute trading volume and its market share every year
Most of the major exchanges offer services in 150+ countries, while the US and South Korea are the most popular jurisdictions with the top trading platforms
Kraken, Coinbase, and Binance are rated as the most secure by experts
Here are just some of the insights you will find in this study:
Mining pools constitute one of the key groups of institutional clients, supplying 28% of all bitcoins
40% of major exchanges have their own native tokens; native stablecoins are a growing trend
The percentage of large exchanges offering a fiat gateway has grown from 43% to 70% (while 65% allow users to buy crypto with a credit card)
Far from all exchanges dedicate enough attention to SEO: only 11 out of the 32 websites can be considered highly optimized
The second-most important search engine in terms of the traffic volume supplied to crypto exchanges is DuckDuckGo; while its overall share in the traffic is just 1.6%, it has grown by 26% since 2018
Almost all of the reviewed websites have regional versions, but less than half of those are set up correctly
Here are just some of the insights you will find in this study:
99% of all visits from search engines originate from regular (text) searches; the share of image, video, and news search is still very small
Direct traffic accounts for 71% of the total web traffic flowing to exchange websites, while visits originating from search engines account for just 11.5%
While mixed-type trading platforms like eToroX and Robinhood are actively promoting crypto functionality, their audience, trading volumes, and revenue are several times lower than those of the leading crypto exchanges
#13: None of the exchanges under study use trigger emails (i.e. emails sent in reaction to the user's actions on the trading platform) and only 50% have an onboarding email sequence
The top 30 exchanges and selection criteria
We have selected 30 popular cryptocurrency exchanges from the top-100 lists on Coinmarketcap, Coingecko, and CryptoCompare. If an exchange was listed in the top 30 of at least two out of these three websites, we included it on the list. The remaining spots went to the exchanges featured on the Coingecko top 30. To these, we added two mixed-type exchanges that feature crypto together with other asset types and compete with crypto exchanges proper: eToro and Robinhood.
It should be noted that an exchange's popularity rating on aggregator websites (which is the same as a trustworthiness rating) is based on several important indicators: liquidity, trading volume, cybersecurity, investments, team, and traffic.
Part 1. Crypto exchange organization, financial operations, and security
This section looks at the fundamental factors the determine the competitiveness of an exchange:

  • Number of countries in which a platform offers services (defines the potential outreach)
  • Security (determined not as much by the absence of hacker attacks in general as by the absence of successful thefts affecting customer funds)
  • Target audience (customer profiling is crucial for effective marketing)
  • Trading volume (points to the depth of liquidity - an essential indicator for experienced and pro traders)
Jurisdictions and geographic availability
This section uses data gathered on Coinmarketcap, Crunchbase,, and Linkedin, as well as on the exchanges' official websites. We found the US and South Korea lead by the largest number of registered exchanges on our list, with 7 and 3, respectively.

Out of the jurisdictions that were very popular back in 2018, only the US retained its position on the list. China and Hong Kong left it altogether. By 2020, four out of the large exchanges registered in Hong Kong changed their jurisdiction, while the trust rating of 3 out of the 4 major China-registered platforms dropped by a factor of 10 or more since 2018, and one of them was even recognized as a scam.
One of the most talked-about crypto events of 2018 was the decision by both Binance and OKEx to move their headquarters to Malta. Also in 2018, Bitfinex announced that it would shift its HQ to Switzerland.

The main reasons for the move in all three cases were increasingly tight regulations, the undefined position of the state towards crypto businesses, and the desire to enter new markets.

Below is a map of exchange HQ distribution, with the size of each circle representing the relative number of exchanges registered in that particular jurisdiction:
The chart below ranks the exchanges by the number of countries whose residents are allowed to trade on each platform. The available countries lists were procured from exchanges' official websites and Fxempire.

Three out of the 32 exchanges are missing: Indodax, AAX, Bitkub. At the time of research, their websites did not feature a list of supported countries.
Poloniex leads in our availability rating with 199 supported countries. On the other end of the spectrum we find Upbeat and Coinone, both registered in South Korea and available only there. Most of the exchanges on our list are available to users from almost all countries, apart from the so-called restricted territories. For instance, Binance is officially unavailable in Belarus and some other states.

It is worth noting that the US often figures on the lists of restricted territories lists. Due to the strict crypto regulation framework in the US, many of the exchanges registered outside of the United States have issues serving American customers (from all or at least some of the states). Bitmart is a good example.

We should also point out that official exchange availability in a country does not mean that all of its products and features will be offered there. Moreover, exchanges can modify the list of restricted jurisdictions at their own discretion according to the changing regulatory and economic circumstances.
Insight #1: Most major exchanges offer services in 150+ countries, with the US and South Korea leading by the number of exchanges officially registered there
Target audience
The many studies that tried to determine the overall number and characteristics of crypto users have all produced different results. While large exchanges possess detailed information on their customers (obtained through KYC), they will not publish these data. Nevertheless, by using only publicly available information we can make several useful conclusions about the number of cryptocurrency users as a whole and the audience of crypto exchanges in particular. We have already conducted a similar study in 2019.

Crypto exchange audiences are growing fast. As shown in the diagram below, the number of crypto users has almost tripled since 2018 (data from the global crypto asset study by the University of Cambridge and a similar study published in 2020).
The crypto gender gap is closing. According to an investor study by Grayscale, published in September 2019, women constitute almost half (43%) out of the 21 million US residents who are interested in Bitcoin. In the UK, according to a June 2020 study by the Financial Conduct Authority women amount to 21% of the crypto community.
Users aged 18-24: the number of women increased by 65%
Users from the Americas and Europe: the number of women grew by over 50%
CoinMarketCap's Q1 2020 report shows that the number of female crypto users grew by 43.24% compared to the previous quarter. The increase was particularly marked within two groups:
Most exchange customers are individuals (retail traders). According to a 2018 study by Cambridge University, crypto exchange customers are distributed as follows:
individuals (retail clients) – 70%
business and institutional clients – 19%
others (unknown) – 11%
The new 2020 study produced similar results, this time with distribution by region:
As we see, the distribution of crypto exchange users has remained largely unchanged in the past two years.
Mining pools are key Bitcoin suppliers. Mining pools are among exchanges' most important B2B customers. According to a recent Chainalysis study that looked at the data for 2017-2020, 28% of all Bitcoins that flow into exchanges (except for those transferred from other trading platforms) come from pools: miners regularly sell the coins they receive as a reward for adding new blocks to the blockchain.
An interesting fact: in 2019, just 10% of exchanges accounted for 77% of all incoming bitcoins. Notably, Huobi and OKex received 29% and 12% of all BTC, respectively.
Exchanges tend to attract local users. According to the 2020 Cambridge University study quoted above, users residing in the same region where a crypto exchange is registered tend to constitute a large share of its users.
User interests correlate with exchange location. We've analyzed the interests of the customers of the 30 largest exchanges using The data for December 15, 2020, shows that most platforms' users are interested in three types of topics:
finance as a whole (up to 26% for some exchanges)
investments (up to 24%)
lotteries (only for 1/3 of the exchanges, up to 32% of users)
We've noticed several interesting geographic correlations:

  1. Interest in lotteries is common for users on the exchanges that attract customers from China (Huobi, OKex, Gate), Thailand (Bitkub), and Indonesia (Indodax);
  2. On the exchanges where users from South Korea constitute over 90% (Upbit, Bithumb, Coinone), the customers tend to be interested in eCommerce and shopping (14-16% of all users);
  3. Many Japanese exchange users (Bitflyer and Liquid) are interested in websites from the food & drink category.
Insight #2: Mining pools are a key group of institutional exchange customers, supplying 28% of all bitcoins
Trading dynamics
This section looks only at cryptocurrency exchanges (i.e. Robinhood and eToro are excluded). The data was procured from

The table below shows the year-on-year volume change. 'Share' indicates an exchange's share in the total trading volume.
Some of the exchanges failed to increase their trading volume between 2018 and 2019. Only 6 out of 15 exchanges can boast positive average volume change values, and the average YoY volume change for all exchanges was just 1.5%. (The table does not include the outlying 8,000% result shown by Oceanex: this exchange was launched only in late 2018, so its numbers have little statistical value.)

2019-2020 was a much more successful period volume-wise. Аverage YoY growth amounted to 170% (we've excluded, which was launched in late 2019). Only 6 out of the 26 exchanges did not demonstrate an increase in trading volumes. Throughout the period under study, only two exchanges on our list enjoyed stable volume growth: bitFlyer and OKex.

It is interesting to look at the dynamics of each exchange's share in the overall trading volume. It is listed in the table (the calculations are based on the average monthly trading volume):
Below is an interactive diagram with the possibility to sort and filter data:
In 2018, Binance, OKex, and Bitfinex could boast the largest shares in the overall volume. Though by 2020, Bitfinex lost its position to Huobi, partly due to regulatory issues.

OKex, which, as we have mentioned, has consistently ranked as one of the top 3 platforms by volume, has also consistently increased its share: from 17% of the overall volume in 2018 to 21% in 2019 and 22% in 2020. Thus, this exchange not only managed to boost its trading volumes every year, but it also increased its market share.

Another thing to note is the fast increase in the average trading volumes on Binance, Coinbase, Kraken, and Poloniex in the last 12 months of the period. Back in 2018-2019, they all experienced volume drops, but in 2019-2020 all these platforms (except for Kraken) saw their volumes rise by over 100%. At the same time, their respective shares in the overall volume fell, apart from Binance.
Insight #3: Three major players account for over 75% of the overall trading volume, though only OKex has increased both its absolute volume and its share every year
Exchange security
Safety and security are among the key factors that determine the level of users' trust towards an exchange. In this section of the study, we've used public reports and rankings that have been published by CER and ICOrating in the past three years. Only cryptocurrency exchanges are reviewed in this section: eToro and Robinhood are excluded from the analysis.

Since every exchange safety rating uses its own methodology, we will not compare individual rankings but rather try to understand how safe major exchanges are and which ones lead in terms of security.

The table synthesizes different security rankings for the whole period under review, with the exchanges ranked by their 2020 safety indicator values.
ICOrating values have been converted from letters into numbers as follows: A+ = 10, А = 9 ... С- = 2.
Want to be the first to get our new studies?
Subscribe to our newsletter, and we'll send you all our fresh content.
To get a general idea of how exchanges compare in terms of security, it is enough to look at the top 15 most secure exchanges for each year. We notice that 7 of them are found on the list every year. These can be considered the safest trading platforms, based on independent expert evaluations. Here are these exchanges, in no particular order:
Six more exchanges from our initial list are included on the top 15 for the second year. They are:
Analyzing each exchange's average 3-year rating, we can identify the industry leaders in terms of security. The top 15 platforms' security rating for the whole period is shown in the chart below.
Only 4 out of the 15 exchanges on this sub-list fell victim to hackers and sustained losses at least once during the period under study: they are Kraken, Binance, KuCoin, Liquid (sustained reputational damage – see the description of the incident) and Bithumb (twice). However, this didn't have much of an impact on the average security rating of Kraken, Binance, and KuCoin. They are still on the list of the top 5 most secure exchanges.
This is probably because, while the above-mentioned exchanges were attacked, the hacks did not directly concern their clients' funds. When users themselves lost money to criminals and hackers, it was usually due to the users' own carelessness or lack of knowledge about crypto security.

The safest exchanges, according to expert evaluations, are Kraken, Coinbase, and Binance.
Insight #4: Our synthetic analysis shows that Kraken, Coinbase, and Binane are the most secure of the exchanges on the list
Conclusions #1
The past two years were marked by a change in the geographic distribution of crypto exchanges. Many of the platforms previously headquartered in China or Hong Kong moved to countries with a better regulatory climate. The US and South Korea still have the highest number of registered platforms from the top-30, indicating a relatively exchange-friendly regulatory framework.

Perhaps it is thanks to these recent moves that crypto trading is now available in more countries than ever before. Most of the leading players support 150+ jurisdictions.

Moreover, exchanges now place a higher priority on security, since it directly impacts their reputation and, therefore, their ability to compete in the market. Since 2018, the exchanges on our list did not suffer any officially recognized hacks or theft episodes involving their customers' wallets and funds.

The full version is available to our subscribers only
Please leave your email to access the remaining 4 sections of the study
Team lead marketing
Anna Sokolova
Research team
Head of research
Ales Kovalevich
Lead analyst
Evgeny Schelakov
Project manager
Evgeny Sergeiev
Alice Orlova
Galina Rybakova
Igor Erenkov
E-mail marketing manager
Vladislav Kovshik
Aliaksandr Dabranau
Julia Herman
Influencer manager
Nikita Kuznetsov
Svetlana Kopach
Polina Holubeva
Anna Mataras
Hanna Tryzniuk
Aleksey Golub
Made on