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A Key Data Point on the Magnitude of the Crypto Exchange Industry’s Capacity Issue

[Update: The original chart posted contained an error that incorrectly labeled "all tokens listed" as "all tokens in existence." Chart updated and some additional notes added accordingly.]

When I talk to professional traders and fund managers (often US-based), the exchanges usually mentioned are Binance, Bitfinex, Bitstamp, Bittrex, Gemini, and Kraken.

Now take a look at this chart by Christian Sims from the Swatt Data Team of “Tokens in Existence Listed Across All Exchanges” vs “Tokens Listed on Key Exchanges”:

Data Source: coinmarketcap.com

It is remarkable how the number of tokens has soared while the totals listed on the key exchanges is basically flat.


It is remarkable how the number of tokens has soared while the totals listed on the key exchanges is basically flat.

In the context of:

  • what I’ve heard of ballooning exchange listing fees,
  • the number of token sales that have initiated in the last year,
  • the requests we’ve already started getting from token issuers to list their tokens,
  • and requests from customers to list more tokens

….this resonates with us.

So what’s the key insight here?

What I keep coming back to from all the different data points I see:

The crypto exchange industry has a major capacity issue.

The exchanges represent a major bottleneck on multiple fronts.

In the general sense this may be non-news to you. But it’s useful for us to start putting specific numbers on the key indicators so we understand just how large the large is at this point in time.

My suspicion is that it’s much larger than you and I realize....

And even though there are over 100 crypto exchanges in the world now, it would seem the industry still needs more exchanges that are reliable, trustworthy, and able to solve the specific trading problems of their target audience.

Before we explore this more, do you have an alternative interpretation? What do you think?

[Additional notes following update: There's some additional nuance in the interpretation to be added. Based on this data, it seems the exchanges have little incentive to add additional tokens to keep pace (or the inability to do so) and additional exchanges would still be needed if the number of instruments continues to expand, even if all the remaining tokens are listed on other exchanges.

So the next question, what does the listing profile look like for the longer tail of exchanges? We'll take a look at that next.]

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A Key Data Point on the Magnitude of the Crypto Exchange Industry’s Capacity Issue
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