The Asian market for crypto has been growing strongly over the past years. Bobby Ong, Co-Founder, CoinGecko shares his thoughts on why it is so.
Asia’s dominance in mining pools
There are 3 reasons in which Bobby uses to justify his thoughts on this growth. Firstly, Asia plays a major role in mining pools and validators. In June 2014, there was only 1 large Asian bitcoin mining pool which was Discus Fish. Forwarding to August 2019, 80% of the Bitcoin Hashrate Distribution is dominated by the Chinese. 6 of 10 top Ethereum mining pools are also Asian operated. 80% of EOS block producers come from China. There is an obvious dominance of the Asian market in this area of crypto.
CoinGecko currently tracks over 5,500 tokens from 363 exchanges. This brings us to the 2nd reason behind the growth of the Asian market which is new exchanges. There has been a 706% increase in new exchanges integrated onto CoinGecko since 2018. Out of these new additions, 40% come from Asia which takes up the biggest slice compared to the rest of the world.
However, one key issue being brought up about exchanges was fake trading volume. On 31 July 2019, Binance had reported $966 million in trading volume. This astounding number only brought them the 14th spot on the list of the top 20 exchanges by reported volume. How crazy is that right? The top exchange, BitMax, had reported $12.5billion which is 13 times more than what Binance is handling.
Trust Score 2.0
For many of the exchanges ranked above Binance, it does raise eyebrows and questions. Fortunately, CoinGecko has launched Trust Score 2.0 to help combat the problem of fake volume. Trust Score was launched in May 2019 to provide additional insights into exchanges’ liquidity through order book and web traffic analysis. Trust Score 2.0 provides a major upgrade by introducing four new measurements. Exchanges’ API technical coverage, the scale of operations, estimated cryptocurrency reserves and regulatory compliance are added to further protect consumers against liquidity issues.
Quoted directly from TM Lee, co-founder of CoinGecko, “As one of the world’s largest cryptocurrency data aggregators, it is our duty to provide critical and actionable data to our users. With the launch of Trust Score 2.0, progress is being made to promote transparency amongst cryptocurrency exchanges. We look forward to innovating further to better evaluate cryptocurrency exchanges based on a comprehensive set of data,”
CoinGecko has also partnered with Bitfury’s Crystal Blockchain and Coinfirm’s AMLT Network. Both partners will provide valuable resources to further enhance the services CoinGecko is providing so far. Trust Score 2.0 is now live and it will be exciting to watch in the next quarters how everything pans out.
Moving back to the last point for growth in the Asian market, innovations due to competition has resulted in lots of progress. We take a look at the classic example which is Binance. Binance caused the popularity of exchange tokens to surge. They also created an IEO model(Launchpad), Binance Dex and Binance Chain.
FCoin caused a huge stir in the exchange business with trans-fee mining. This was extremely popular in 2018 Q3. Bitmex and OKEX Futures lead the world in crypto futures and perpetual swaps. Many exchanges are opening their eyes to this now and are looking to offer derivatives for their customers.
The Asian market isn’t showing the signing of slowing down and the rest of the world has lots to catch up on. There are a lot of compliance issues around the world where many Asian countries are more lax about. The truth is that many crypto projects look to find their base in an Asian country where they have lesser things on their hands to worry about. Asia has indeed shown great development and openness in this in this industry. A leap for Asia, a step forward for crypto!
Read more updates from Invest Asia 2019 here.