In the past three months, the token market continues its unpleasant bearish state. According to TokenInsight analysis, the TI index, which reflects the overall performance of the blockchain industry, has dropped by 43.41% at its lowest point. As TokenInsight continues to track the token market, we now present an update to our quarterly exchange ratings. In this update, seven exchanges were upgraded, four exchanges were downgraded, and seven new exchanges were added.
Main reasons for the downgraded exchange ratings are encompassed by the significant decline in traffic and the improper changes of trading rules which caused the loss of client interests. Main reasons for the upgrade of some exchanges include progress in compliance and user growth.
Exchange Development Analysis
Except for Bithumb, the monthly UVs of all exchanges have decreased to certain degrees. 6 out of 15 top-ranked exchanges in October have shown more than 20% decrease in the last three months.
At present, exchange traffic is highly concentrated on Binance and Coinbase, the two leading token exchanges. Binance, which had about 35 million UV in October, currently ranks first, and has about six times as many UV as Poloniex, which currently ranks third.
At the same time, global token market regulatory policies have become stricter, making most exchanges direct their focus to actively work on compliance. Exchanges are currently looking to enter into strategic cooperation with local compliant exchanges or begin establishing their own local branches.
At present, HitBTC and KuCoin have the highest user dispersion in the world, with user visits accounting for at least 1% of their traffic from 28 different countries/regions.
Furthermore, additional exchange services and products are constantly being enriched to improve service quality and gain market traction. For example, exchanges are now looking into providing a compliant way for fiat deposits. In terms of product, mainstream exchanges are based on token trading while expanding businesses on derivative products, project research, and more.
Rating Results are as follows:
Bit-Z Downgraded from BBB to BB
Bit-Z is a token exchange established around the end of 2016. Currently, about 140 tokens can be traded on its platform. Bit-Z is gradually expanding its compliance market. BitKop and Bit-MY, both belonging to Bit-Z respectively, obtained its own Philippine license in September and a Malaysian one in November. Yet, the user activity of the platform has decreased significantly, with about 250,000 UV in October.
FCoin Downgraded from BB to B
FCoin is a young Hong Kong-based token exchange founded in May 2018. Currently, there are more than 170 tokens listed, but the quality of tokens listed on its platform is quite poor. “Transaction Mining” trends once brought a large amount of traffic to the platform, due to the notion that the vast majority of transactions of transaction fees or dividends were free, and transaction volume has dropped significantly in the past three months. In terms of compliance, FCoin has lagged behind in development and has not obtained any license of relevant regulatory agencies.
LBank Downgraded from BB to B
OKEx Downgraded from A to BBB
OKEx is a token exchange established in 2014. Currently, OKEx provides spot, futures and other trading services.Its daily trading volume is in the leading position. OKEx has launched a variety of stablecoins, and has successively removed some other tokens. Currently, there are about 200 tokens on its platform. OKEx has repeatedly unilaterally changed its trading rules during our rating period, including data rollbacks and modifying its contract delivery rules. In the case of the BCH hard fork, OKEx delivered the last transaction price of BCH contract ahead of schedule at 16:05 p.m. on November 14, 2018 (GMT+8), and issued an announcement only one hour in advance, causing unnecessary losses to a large number of investors. It still has a first-mover advantage in terms of contracted products but faces competition from new entrants.
Bitbank Upgraded from B to BB
Bitbank is a Japanese token exchange with an operating license issued by the Japan Financial Services Agency. There are only 6 tokens listed on the platform, most of which are mainstream tokens such as BTC and LTC. Bitbank currently supports trading fiats in the Japanese Yen. BitFlyer, another mainstream exchange in Japan, stopped new user registrations in Japan, and had a positive impact on the number of users and trading volume of Bitbank. Bitbank’s trading volume has increased to about $15 million per day after the adjustment. From August to October, there was no significant downward trend of monthly UV, which has remained around 1.5 million, with a slight increase in September.
Bithumb Upgraded from B to BB
Bithumb is a South Korea-based token exchange founded in 2014.I In the recent overall token market downturn, Bithumb’s daily trading volume rose significantly. According to the Blockchain Transparency Institution’s data, Bithumb’s average daily trading volume was about $140m in August and about $400m in November. In October 2018, Bithumb was acquired by the Singapore-based BK Global Consortium. However, Bithumb users are mainly from South Korea and it has a very high degree of user concentration.
BitMart Upgraded from B to BB
BitMart is a token exchange established in November 2017. It was officially put into operation in March 2018, and the operation time was relatively short. So far, there has been no security problems on its operation. In October 2018, through collaboration with Simplex, BitMart opened a channel for credit card purchases. This allowed users to purchase ETH and BTC with VISA or MasterCard services. In the last three months, the platform has listed more than 20 tokens. While the overall market capitalization of the newly listed ranks low, the trading volume of the exchange has risen significantly in the same period, averaging about $18 million per day.
Coinsuper Upgraded from CCC to B
Coinsuper is a token exchange registered in Hong Kong and established in February 2018. At present, the platform supports U.S. and Hong Kong fiat to purchase tokens. About 50 tokens have been listed, including GUSD, USDT and other stablecoins. The platform heavily emphasizes importance on compliance and regulations. In October 2018, it obtained the Money Service Operators License and Money Lenders License in Hong Kong. Coinsuper’s trading volume currently lies at about $60 million per day, ranking higher in comparison to others..
HitBTC Upgraded from B to BB
HitBTC is an exchange established in 2013. It has been operating for a long time and there are no security breach incidents so far. There are many tokens on the platform, but the quality varies. At present, HitBTC has more than 400 tokens listed, with more than 900 token pairs. Its users are relatively scattered, mainly distributed in North America, Asia and so on. The average daily trading volume has increased significantly in the past three months, from about $250 million in August to $320 million in November.
Kraken Upgraded from B to BB
Kraken is a San Francisco-based token exchange founded in 2011. At present, Kraken has listed more than 20 tokens, and the newly added tokens in the last three months are of good quality. According to the market capitalization rankings, the tokens listed on its exchange rank among the top 200. Its recent average daily trading volume has been stable, with no downward trend compared with August and sitting at about $100 million. Kraken supports fiat transactions in Europe, North America and Asia, including fiats such as the US Dollar, Euro and Canadian Dollar.
KuCoin Upgraded from BB to BBB
KuCoin is a token exchange established in July 2017 and headquartered in Singapore.
In November, KuCoin announced series A financing from IDG Capital, Matrix Partners and NGC totaling $20 million. At the same time, through the cooperation with Simplex, users will be able to purchase tokens directly with credit cards, thus providing a smoother channel for fiat deposits. At present, KuCoin supports more than 190 tokens and provides services in 12 languages with fast response speed of customer services. Considering that the overall market is bearish, users on KuCoin is quite active. Recent average daily trading volume is about $20 million and current UV has reached more than 5 million in October with wide user distribution.
New: Poloniex Rating BB
Poloniex is a Boston-based token exchange founded in 2014 with investors including Bittorrent, IDG and Goldman Sachs. Poloniex has been operating for nearly five years, and no major safety incidents have occurred. Poloniex obtained a full license to operate after Circle’s acquisition and has fiat currency channels (US Dollar, British Pounds and Euros), as well as Circle Trades institutional clients. Poloniex, which has about $40 million trading volume per day, currently offers only one language service and has not expanded internationally enough.
New: Liquid Rating BB
Liquid is a token exchange owned by Quoine, a Japanese fintech company. In September 2018, Quoine changed its name to Liquid. Liquid has a legal operating license in Japan, allowing it to buy tokens using fiat currencies such as the Japanese Yen. The platform funds are 100% stored in cold wallets. Currently, the platform supports 52 tokens, with average daily trading volume at about 14 million US dollars in November.
New: Gemini Rating BB
Gemini was founded in 2015 and operates under the supervision of the New York Department of Financial Services. The main team members all have working experience in the traditional financial industry and so far, there has been no major security incidents on its platform. The dollar funds that users keep in Gemini are eligible for insurance, but only to at a limited extent. Their compliant stablecoin GUSD is issued by Gemini. The exchange currently supports trading in fiat (US Dollars) and provides a better trading experience than other exchanges. However, Gemini had about 860,000 UV in October and about $19 million per day in November, both midstream in the industry.
New: EXMO Rating B
EXMO is a London-based token exchange founded in 2013 and has been operating for five years without safety incidents. EXMO’s outstanding feature is its global layout, especially in European countries. Its official website supports 12 languages. EXMO currently supports 6 fiat currencies (US Dollar, Euro, Rupee, etc.), with about 1.74 million UV in October and an average daily trading volume of about $27 million. According to public information, GoverMedia, a Canadian company, has signed a letter of intent to acquire EMXO.
New: BitBay Rating B
BitBay is a token exchange established in Poland in 2014. At the end of May 2018, BitBay’s partnership with Polish banks has been suspended and their business relocated to Malta. It supports US Dollar, Euro and Zloty, as well as exchanges among them. The platform currently has more than 20 tokens, with average daily trading volume of about $17 million in November. BitBay has issued BitBay Card that can be used to withdraw cash from ATM or to buy products and services.
New: Coinone Rating B
Coinone, founded in February 2014, is a token exchange registered in Seoul, South Korea. Currently, the platform offers less than 30 tokens, and its users are mainly distributed in South Korea, Indonesia and Malta. Coinone currently only supports the Korean Won. The platform has set up an offline physical exchange in Seoul in 2017 to support users to conduct face-to-face transactions.
New: YoBit Rating B
YoBit is a token exchange founded in 2015, and its website supports languages including Chinese, English and Russian. Its team information disclosure is minimal, the number of tokens listed are more than 300 with variable quality. User activity was high, with 5.75 million UV in October.