The next Bitcoin (BTC) may be in the DeFi. Major cryptos exchanges have increased their market share since October 2020. They have also made progress in terms of regulatory compliance, security, and customer assurance.
Better compliance, better security
According to data from cryptocompare.com, the market share of major cryptos exchanges increased by 13% between October 2020 and January 2021, from 61% ($347 billion) to 74% ($1.41 billion).
The study covered more than 160 exchanges. In particular, Cryptocompare pointed out that exchanges are increasingly complying with regulatory requirements concerning the fight against money laundering.
Cryptos exchanges are much more transparent in terms of data provision.
44% of the cryptos exchanges analysed offer the possibility to access complete historical trading data via a public API access point.
According to cryptocompare.com, the number of hacks has decreased in 2020. 20% of the exchanges surveyed said they stored more than 80% of their cryptos in cold wallets, compared to 15% in July 2020.
Only 1% of exchanges were hacked last year, compared to 4% in July 2020.
18% of exchanges used a third-party custodial service provider to store their customers’ cryptos, compared to 12% in July 2020, and 9% in the fourth quarter of 2019.
Cryptocompare also pointed out that 9% of cryptos exchanges officially offer some form of insurance. 37% of the exchanges analysed hold a legal licence for their activities.
The year of DEX
2021 could be the year of the DEXs, which have the opportunity to catch up with the CEXs, with the development of the DeFi.
The Uniswap (UNI) reaches new ATHs in February 2021. It is trading at USD 29 at the time of writing.
Can the governance tokens of cryptos exchanges see their price multiplied by 1,000 in the next 3 to 5 years? DEX and CEX are far from perfect at the moment, but they are improving in terms of regulatory compliance, security, and customer coverage. DeFi is still in its infancy; the industry is currently only attracting early adopters of cryptosystems. New nuggets are likely to emerge, challenging Binance (BNB) and Uniswap. It is up to DeFi investors to spot them as soon as possible, in order to take full advantage of them in the long term.
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