700% Rise in Revenue for Crypto Exchanges in 2021

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ByG. Dautovic
March 16, 2022

In 2021, the trading revenue of cryptocurrency exchanges hit $24.3 billion. According to financial-services consultancy firm Opimas, this figure surpassed the revenue generated by the New York Stock Exchange and the Nasdaq for the first time.

The revenue of cryptocurrency exchanges jumped more than 700% from the already record-breaking earnings in 2020, which stood at $3.4 billion. 

In 2021, the annual income was 60% higher than the roughly $15.2 billion brought in by exchanges trading with traditional securities. 

“This is quite a shift from only a year earlier when the traditional exchanges had revenues four times greater than exchanges of the crypto world,” wrote an Opimas analyst for the digital asset industry, Suzannah Balluffi. “The old, venerable names like the New York Stock Exchange, Nasdaq, Deutsche Borse, and CME have all been left behind in the dust by crypto startups Binance and Coinbase.”

Binance and Coinbase are the largest companies in the industry and the biggest winners in the explosive growth of crypto trading. Binance Holdings Ltd. earned 69% of the estimated revenue, amounting to $14.6 billion in trading fees. The publicly traded crypto exchange, Coinbase, reported annual earnings of $7.8 billion in 2021, a significant increase from $1.3 billion in 2020.  

Intercontinental Exchange Inc., which owns both the NYSE and the London Stock Exchange, is the only company with higher revenue than Coinbase. Meanwhile, Binance’s earnings are estimated to have surpassed every traditional exchange by a significant margin.

While the crypto market is expanding, a recently issued executive order from President Joe Biden directed federal agencies and departments to provide solutions for overseeing the cryptocurrency industry. 

According to Balluffi, more regulatory scrutiny poses a major challenge for the cryptocurrency industry. But she argues that companies will benefit from proactively implementing regulations. 

“When it comes to compliance, crypto companies will face a choice: work with regulators or continue to battle against them,” said Balluffi. “The latter strategy has resulted in large financial penalties and loss of market share, and we see exchanges moving towards the former, such as Binance and Bitmax.”

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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