Cryptocurrency exchanges have over time kept on increasing their operational standards and transparency, to the point most trading platforms are now considered Top-Tier and improved security has led to fewer hacking incidents.

According to CryptoCompare’s Exchange Benchmark report, Top-Tier exchanges, those graded AA-BB, have gained an additional 13% market share in the last four months, from October 2020 to January 2021 – the same time period that saw the price of Bitcoin surge from little over $11,000 to a new high above $40,000.

The report details that Top-Tier exchange market share grew from 61$ to 74% over said period, with these platforms going from trading $347 billion to $1.41 trillion per month. It adds that based on its grading, market share for last month would have been of 85% for these platforms.

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Market share for Top-Tier trading platforms partly increased because the number of exchanges being considered Top-Tier also increased to 84, up from 68 in July of last year. This, the report adds, as exchanges “increased their operational standards and transparency due to regulatory requirements and a competitive marketplace.”

Source: CryptoCompare



Exchanges throughout the cryptocurrency space have generally improved their security since July of last year, the report notes, with 20% of trading platforms in the space now holding more than 95% of their funds in cold wallets, up from 15%.

Moreover, 1% of exchanges were hacked in the last year, compared to 4% at the time of the last report. While security incidents are dropping, exchanges using an external on-chain transaction monitoring provider increased from 16% to 25%, and only one-third of exchanges were rated as “having poor or inadequate KYC (Know Your Customer) programs, down from nearly half in July.

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Data transparency, CryptoCompare’s report adds, has also improved, with 44% of exchanges offering the ability to query full historical trade data via a public API endpoint, up from 37% in July. 9% of exchanges now also offer “some form of cryptocurrency insurance,” up from 5%, and 37% are registered as money service businesses or possess a cryptocurrency exchange license.

Featured image via Pixabay.


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CryptoCompare Report Highlights Top Crypto Exchanges and Why They Stand Out

by John R. Potter
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