Cryptocurrencies may not have had an exemplary year. But exchanges did. In fact, major exchanges continue to rake in billions in revenue, despite depressed cryptocurrency prices.
Coinbase Expects to Post $1.3 Billion in Revenue
For 2018, the United States’ biggest cryptocurrency exchange expects to produce revenue of $1.3 billion, according to Bloomberg. On top of that, it’s expected to post a profit of $456 million. That’s quite an improvement from a 2016 loss of $16 million in 2016, and a $380 million profit in 2017.
Binance Expects to Post $1 Billion Profit
CEO Changpeng Zhao expects Binance to produce a profit of $1 billion for 2018.
The company now supports over 10 million customers, generating an average of $1.5 billion in trade volume each day. That’s up from just a million customers from the start of 2017.
It doesn’t hurt that Zhao believes the cryptocurrency market could grow 1,000x or more.
“I will say ‘crypto will absolutely grow 1000x and more!’ Just reaching USD market cap will give it close to 1000x, (that’s just one currency with severely restricted use case), and the derivatives market is so much bigger,” he noted on Twitter.
Why the Market Slump Doesn’t Impact Exchanges and the Billions They Make
With cryptocurrencies well below their values at the start of 2018, it would seem impossible for these exchanges to generate the billions that they do. However, there’s a simple explanation for this.
Much of the produced revenue comes from transactional and trading fees.
For every transaction – whether a trade or withdrawal – the exchange generate fees. Despite depressed cryptocurrency prices, investors continue to trade heavily every day. That, in turn, produces a significant revenue stream amounting to billions for some exchanges.
Plus, there are plenty of reasons to be bullish on cryptocurrency
Adoption has only just begun.
Banks such as Citigroup and Goldman Sachs are aiming to offer crypto products. The NASDAQ is about to hand institutional investors analytical tools for trading hundreds of crypto assets. Additionally, the Intercontinental Exchange (ICE) is launching Bakkt. Its intention is to create an “open and regulated, global ecosystem for digital assets.”
As long as the cryptocurrency market can be traded, exchanges will flourish raking in billions of dollars.
Want the latest crypto news? Join our Telegram Channel
