We’ve all heard approximately Binance, Bitfinex, Kraken, Coinbase and other huge cryptocurrency exchanges. however if they’re the most important ones, who’re the smallest? And what separates those anyone has heard of from lesser regardedones, keeping smaller exchanges from reaching a similar trading volume?
Cryptonews.com looked at often exchanges with much less than USD 10,000 in buying and selling quantity over 24 hours. As of the time of writing, there are 15 such exchanges indexed on Coinmarketcap.com, including the ones whose general 24-hour trading extent is unknown – handiest 3. All records is from Coinmarketcap.com and updated for September 14th, 2018.
Spoiler alert: the motive is often a few type of specialization.
Small coins and fiat specialization
There can be many specializations. The first one in our case means that the exchange’s majority of trading volume is made up from pairings of coins at least below the top 10 line by market cap – often way under that line. One of those small coins is HEAT, with a market cap of less than USD 1.2 million and 830th spot on Coinmarketcap, traded in HEAT/BTC pairings on the HEAT Wallet exchange (volume USD 564).
Svante Lehtinen, the CEO of the alternate, explains that that is also no longer the handiest purpose: “the warmthalternate is a dispensed asset exchange, that means that all trades occur at the decentralized heat cryptocurrency blockchain, holdings are stored on a consumer‘s aspect, and so on. it is one of the first ones, launched in 2016. the mainmotive for bad marketplace penetration is the unwillingness to market it and acquire high consumer base, as well asgrowing the generation, and more these days the prison infrastructure to be capable of serving mainstream tradingvolumes. As we know, this aim remains unreached by way of any decentralized exchange, which, however, are probableto replace the centralized competitors at some stage in the next few years with the aid of huge.”
The change is a sufferer of malicious actors as properly. “The secondary motive for the lack of success and for that nothappening is committed, continuous and excessive effort trolling from unknown parties to gradual down marketcognizance and discredit the aspiring, complex generation,” Lehtinen advised us.
there is also the case of fiat specializations: exchanges offer Bitcoin and Litecoin in alternate for Polish złoty (PLN): Bitmaszyna (extent of USD 72) and Dgtmarket (volume unknown). however, simply the truth that they offer PLN pairings isn’t always a whole rationalization, as there are comparable exchanges that change a good deal better. thoseare BitBay (extent more than USD 18 million), Coinroom (quantity extra than USD 7.5 million)and BitMarket (volume around USD 500,000).
A huge difference between these two groups in the case of PLN is that the small exchanges only offer their websites in Polish, while the big ones offer it in English, presumably reaching wider audiences. While the first group can only be used by those who speak Polish, the second is for every English-speaking person – and the fact that they offer PLN pairs only comes as an added bonus. Another possible reason is that the larger exchanges that offer PLN pairings seem simpler to use and just look better. Although that may not be a big factor, it may make a difference in the case of less tech-savvy users.
Language and growth plans
The language is also one feature of the GuldenTrader exchange, a Dutch cryptocurrency exchange that only trades with NLG/EUR pairs and the website is completely in Dutch – but you can change the language to English if you prefer, although navigation can be confusing. Gulden (NLG) is a coin that is ranked 301st on Coinmarketcap.com and has a market cap of slightly above USD 10 million. Its Dutch exchange is even tinier, with a volume of USD 908. However, there might be hope: Rogier Bruggeman of GuldenTrader told us in an emailed statement, “More coins will be added starting November,” also revealing that they are working on a new exchange: “We are almost ready with our first version of the software and will start a marketing campaign next year.”
Another way that GuldenTrader is trying to attract new users is through an incentive program: “Another interesting fact is the opportunity to get internal shares that generate dividend. All trade fees are split between 100.000 shares in dividend. The exchange holds 80% of the shares and the rest are on the market. Al shares on the market are from our traders. Once trade volumes are high enough, we hope to pay dividend each day! The shares on the market can also be traded,” Bruggeman told us, adding: “What can be done to generate more volume? Get more traders that like to see their favorite coin or token listed against euro.”
The other exchanges with small trading volumes have most, if not all, of these characteristics: LEOxChange offers LEOcoin pairings (rank 1089 on the Coinmarketcap.com) and has a total daily trading volume of USD 13. ISX is a tiny Icelandic exchange that offers a single pairing: AUR/ISK (Auroracoin, ranked 586th with the Icelandic Krona). The largest of these exchanges is C-Patex, offering trading with Dogecoin, Reddcoin, EmberCoin (1803rd) or PeepCoin (1026th).
In conclusion, the exchanges are small because they are catering to a small subset of the crypto community, either by interest in tiny coins, fiat currencies or languages. Although some of them might boost their numbers with adding more coins, most of them will probably never see mass market adoption – because the percentage of the population speaking Icelandic is extremely small. However, that changes nothing in the fact that these exchanges will often have a loyal userbase, enough to keep them going – even if under the radar.