In June, US Securities and Exchange Commission Chairman Jay Clayton reaffirmed his belief that nearly all initial coin offering (ICO) projects should be considered securities, fanning the flames of a long-standing debate about the nature of cryptocurrencies. On one side of the argument, people like Clayton suggest that crypto projects are only good for speculative trading, while, on the other side, people like Ethereum founder Vitaly Buterin say that crypto is inherently valuable. So, who’s right? Is crypto’s only purpose to make traders rich or do tokens bring value to diverse markets on their own?

ICORating has decided to get to the bottom of this question once and for all. Weighing in on the debate, we’ve produced a new report on cryptocurrency trading volumes, looking at how and where people buy and sell crypto. The report provides a comprehensive comparison of over-the-counter (OTC) crypto trades and exchange-based trading, looking at the crypto market as a whole as well as individual cryptocurrency projects.

Higher trading volume on exchanges indicates a greater speculative function for the token, while higher OTC volumes, which occur within the token’s blockchain ecosystem, indicate a utilitarian function.

In our report, we analyzed the OTC and exchange-based trading volumes of the top 34 cryptocurrencies, which account for over 80 percent of the total industry market cap over 2 periods, 2018 year-to-date and the 30 days from June 26 to July 25. We found that OTC transactions accounted for 58.7% in 2018 YTD and 60.9% in the last 30 days, indicating that the majority of trading was of a utilitarian rather than speculative nature.

Trading statistics vary greatly from coin to coin, some are almost purely utilitarian while others are clearly used as speculative trading instruments. Of the projects we analyzed, Cardano (ADA) and NEO (NEO) showed the highest utilitarian functions, with OTC trading volume accounting for 97.8 percent and 66 percent respectively. On the lower end of the scale, Waves (WAVES) and Ethereum Classic (ETC) proved to be the most speculative tokens on the market, with exchange-based trading volume accounting for 86.9 and 82.1 percent respectively.

Importantly, OTC trading for both Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrency projects on the market, was just slightly higher than half. OTC trading accounted for 50.6 percent of all volume for BTC and 51.6 percent for ETH.

Find additional results in our new Cryptocurrency Trading Volume report.