Why LGO is the next generation Crypto-Exchange (2/3)

An overview of the current crypto-exchange landscape

In “Why LGO is the next generation Crypto-Exchange (1/3)”, we’ve detailed the crypto-currency trading activity. In this article, we provide an overview on the current state of crypto exchanges, and touch on the need for a third generation of exchanges, geared towards institutional investors.

The Fiat/Crypto Exchange Industry has been Growing Exponentially

Oftentimes, mainstream media headlines about digital currencies focus on extreme volatility episodes of bitcoin prices obscuring the fact that the fundamental drivers have been growing at a steady pace. Indeed, the fiat/crypto traded volume growth has been steady since bitcoin has been made available on the first exchange in 2009. The chart below displays the total daily volume of bitcoins traded in dollar terms on a log scale since 2010. While BTC/USD exchange rate have changed by multiple orders of magnitude over time, the dollar volume traded has been growing at steady rate of 450% per annum.

The Third Innovation Wave will Hit Crypto Exchanges:

Since bitcoin has been listed on the first exchange, digital currencies’ market cap and bitcoin market cap in particular have grown tremendously following three consecutive bitcoin cycles corresponding to three massive waves of money inflow:

2010–2011: The launch of the first generation of crypto-exchanges such as BitcoinMarket.com and MtGox.com allowed the first crypto enthusiasts to trade their fiat currencies against bitcoins. The liquidity was very low, the volatility very high and bitcoin was still considered a cryptographic experiment by most buyers. However, the bitcoin price grew very quickly from less than 1 cent to 30 dollars catching the attention of a wider audience.