Cryptocurrencies have forever restructured the financial ecosystem! As of August 2024, the market cap of the entire crypto market stands at 2.21 trillion dollars. As of Q2 2024, Centralized Exchanges had 1.8 trillion dollars worth of transactions, while Decentralised Exchanges had 370.6 billion dollars worth of transactions. With more people opening up to the idea of digital assets, trading platforms for cryptocurrency have become a necessity.
Overview of Crypto Exchange
A crypto exchange is an e-marketplace where users can buy, sell, and trade their cryptocurrencies. There are two types of crypto exchanges: centralized and decentralized exchanges. Centralized exchanges act as custodians while decentralized exchanges allow users to have complete control over their private keys and funds with the use of self-custodial wallets.
Some of the best crypto exchanges, like Binance, Coinbase, and OKX, have active users of 30 million, 8 million, and 50 million, respectively. In addition, Binance and Coinbase, which are preferred by most traders, have an average liquidity of 862 and 766. Thus, there is no room for doubt that the best cryptocurrency exchange platforms are making their mark in the global economy.
Future Prospects of Cryptocurrency Trading
As regulatory frameworks are restructured and the adoption of cryptocurrencies booms, crypto trading is set to dominate the market, and crypto exchanges will prosper. According to Technavio’s report, the crypto market size is supposed to increase by $34.5 billion, with a CAGR of 16.64% in the span of 2023 to 2028. As rapid adoption of these digital assets branches into mainstream finance, the crypto market is forecasted to reach a whopping $345 million in 2024 itself, heaping up to an estimated $462 million by 2028. With the U.S. government now holding Bitcoin, North America is foretold to contribute 45% of the global market within the next four years. With new regulatory oversight, such as the Virtual Assets Regulatory Authority in Dubai and MiCA provisions in France, in motion, cryptocurrency market trading is going to lead the way.
What will the size of the crypto market be in the future?
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The cryptocurrency market is expected to grow by USD 34.5 billion, with a compound annual growth rate of 16.64% from 2023 to 2028. Several factors fuel the sector’s robust growth.
With more businesses adopting cryptocurrencies as a method of payment and investment option, the demand for these assets is likely to grow further. According to EY reports, almost all institutions, about 94%, have faith in the digital assets industry and its capability for significant returns from the cryptocurrency and blockchain ecosystem in the long term.
Additionally, cryptocurrency wallets and exchanges have become much more accessible with proper security measures in place, which have reinstated investor’s trust in choosing crypto as part of their diversified portfolio.
| Year | Crypto Market Cap (USD Billion) | Global Money Market (USD Trillion) |
| 2023 |
4.32T (Approx) |
169 |
| 2022 | 2.0 trillion | 168 |
| 2021 | 3.0 trillion | 160 |
| 2020 | 1.4 trillion | 152 |
| 2019 | 190 billion | 144 |
| 2018 | 800 billion | 137 |
| 2017 | 600 billion | 130 |
| 2016 | 10 billion | 124 |
| 2015 | 29 billion | 118 |
| 2014 | 10 billion |
112 |
Source: CoinMarketCap and International Monetary Fund (IMF)
From 2014 to 2023 alone, the crypto market cap increased from a mere $10 billion to $4.32 trillion. In recent years, the growth has skyrocketed, with the market cap nearly doubling from $1.4 trillion to $3 trillion between 2020 and 2021. In 2014, with only a $10 billion market cap, the global money market stood at $112 trillion, which in 2023 is a little over $168 trillion, a significant growth of 50.89%.
Emerging Trends in Cryptocurrency Trading
The launch of De-Fi platforms today allows peer-to-peer transactions without any central authority and has given rise to looking at finance in a more democratic preview. The lines between traditional and decentralized finance are slowly blurring as more institutions are gladly adopting cryptocurrency as a valid form of payment. As traditional financial institutions are prone to human error and are often time extensive in nature, many institutions are looking to leverage the ease of use and transparency that blockchain brings to the table; therefore looking to trade via the most secure cryptocurrency exchange. With increased efficiency and security, many banks are also offering crypto investment options to their clients. Further, the rise in decentralized exchanges has been known to reduce the risk of hacks that often come along with centralized exchanges and promote an inclusive global financial market.
Conclusion
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As digital assets continue to seep into the mainstream, their influence on global finance cannot be overstated. This gradual shift from centralized finance to a mix of crypto and fiat currencies is the harbinger of a new form of financial transformation. This interlude provides both opportunities and challenges that can help redefine the impact of crypto trading on the future of finance. As we go about navigating the future of the best crypto exchanges, understanding how they can fit in a hybridized financial setup is crucial. It is time we pave the way for an inclusive and adaptable finance system.