As major crypto exchanges evolve into all-things-financial-services platforms, they’re investing more in new products to grow and diversify, while increasing trading revenues has become challenging.
Key Takeaways
Trading revenue is becoming a smaller part of exchanges’ business.More rewards and incentives could emerge as exchanges compete to grow newer products and reduce their reliance on trading activity.A potential return of the bull market could revive trading revenues while intensifying competition over fees and users.As the bear market persisted during the second quarter of this year, three of the largest listed crypto exchanges — Coinbase, Bullish, and Gemini — recorded a drop in trading revenue quarter-on-quarter. At the same time, Coinbase and Gemini are focusing more on relatively new products they want to grow, such as stablecoin products and prediction markets.
The change in market structure has affected the strategies that, in turn, directly affect users of these platforms.
More Rewards for Stablecoins and Prediction Markets Supporting Trading and Improving Fee Economics Blurring Lines and Increasing CompetitionThese changes might also be supported by the blurring line between crypto asset and traditional finance platforms, as both worlds are starting to support each other’s products, increasing competition further. Hopefully, this will be beneficial for regular traders and investors too.
