Hundreds of Cryptocurrency Exchanges Compete for 30% Market Share
According to Coinhills statistics, there are currently over tens of thousands of cryptocurrency exchanges around the globe, but only 187 of them are operational and active. In their 2018 Research Report on Cryptocurrency Exchanges, Timestamp Capital points out that “in a stagnant market, the head effect (a Chinese market concept similar to the 80-20 effect) is now more evident for cryptocurrency exchanges. The top 6 exchanges have over 3 billion in trade volume each and takes up 58.9% of the total trade volume. The top 14 exchanges have over 100 million in daily trade volume and takes up 73% of the total trade volume.”
Which means the rest of the two hundred or so cryptocurrency exchanges only have, in total, less than 30% of the entire market share.
Making matters worse, visits to these exchanges are continually on the decline.
On October 12, Bloomberg reported with data collected by Tribe Capital, a venture capital firm focused on fintech, that one of the world’s largest crypto exchanges, Coinbase, has been hit hard. Tribe states that the number of U.S. consumers trading on Coinbase in September has decreased by 80% compared to last December.
Statistics from Tokenmania also shows that there were 81 million visits to the top eight exchanges (Binance, Huobi, OKex, Bitfinex, Bittrex, Bithumb, Bitmex, and Poloniex) in September (between August 18, 2018 to September 18, 2018). This marks a 4.9% decline from the 85 million visits in August. Visits to exchanges have been in decline for four months and market popularity continues to wane.
Exchanges are paving a new path to face the current disaster. DragonEx innovated a “trading equals mining” model and centered their efforts for a full-on expansion in mid-2018. Unfortunately, the open and transparent mechanism unique to the blockchain along with the nearly nonexistent cost for reproduction assures that any innovative model will be copied and replicated into ubiquity. According to statistics from Feixiaohao, there have been more than a hundred new exchanges since June that are touting the trade mining model. Established exchanges such as OKex and Huobi Pro have also come up with their own model for “trading mining.”
An innovative model is effective for attracting users in the initial phases, but once there are enough users, the mid-to-long term must be devoted to operations in order to gain a stable foothold in the market.
Youcan Huang is a senior internet operations expert and author of the bestselling book, Online Business Operation. He clearly stated that, our era started out from being concept-driven and product-driven, but now we are in transition to being operations-driven. More and more so, operations will determine whether or not a product can make it.
The failure of pioneers are invaluable experiences for those who follow in their paths. Many exchanges that have entered the market late are striving to grow and expand faster by focusing on operations and perfecting its many dimensions. BitAsset, is one of these new cryptocurrency exchanges that tackles this head on.
According to statistics from Coinmarketcap, Binance trading volume peaked in January 2018 and has fallen 80% since then. Many investors choose to wait or reduce their holding in this market and the incentives that exchanges are providing to consumers are hitting the roof of the exchange market. With demand high and supply low, BitAsset opts to focus on the offline, untapped market outside of the online cryptocurrency exchanges.
Case Study of BitAsset: an Exchange Tackling New Demands in Cryptocurrency Trading
Recruiting an Offline Sales Team
The market fluctuates but user demand for investment and financing does not. BitAsset is building a sales trainee system to fill the large gap in the offline market. The core team has a staff of 50 and are focused on establishing sales channels, team-building, operating user customer clubs, etc. to support a rapid development of sales systems across the world. The initial phase was building a management team of 1,000 people in Mainland China and other SEA countries, providing investment, consulting, and other services 24/7 to platform users. Offline learning and interaction activities are also hosted for high net-worth clients. Within one week of this new model, over 10,000 users registered with BitAsset.
A Targeted Community Operations
After recruiting a large number of users, the greater challenge lies in how to keep and maintain them. The core to BitAsset’s community operations is centered on community decentralization: seeking and training followers while also helping users establish a community. More specifically, BitAsset employs a ladder structure in community operations, comprehensively covering industry KOLs to newbies. BitAsset invites renown WeMedia content creators as well as professionals to provide full content coverage on price analysis and industry information for the community. At the same time, BitAsset promotes growth in its users by regularly inviting experts to events such as the weekly futures talks.
Coupling of Online Activities
After successful community operations and secured user activity, BitAsset began a series of online activities to realize synergy and maximize user conversion. BitAsset launched a transaction race spanning half a month at the end of August. They perfected the feedback mechanism and optimized the strategy for localization. Within a short period, the number of registered users broke 20,000 with 150 users taking away 16 million in prize money. The transaction race played a prominent role in warming users up to investments.
Success with Differentiation
BitAsset’s focus on offline sales combined with online operations has achieved great success. The average cost of getting a paying user in the industry is 43 to 75 USD, but with BitAsset’s precision offline operations, the cost is lowered to less than 17 USD per person. According to official statistics, BitAsset has over 500,000 registered users, 10,000 users that are actively trading, an average purchase of 7,235 USD per person, and a trade volume of nearly 25 billion in 24 hours.
In this age where operations is everything, the value of a user is no longer simply during the transaction. The long-tail effect still exists and is prominent, which is why BitAsset’s “break out” model deserves our attention. Compared to traditional investments, block chain investments are still considered as niche. The industry needs time to mature and educating users still has a long way to go, in order to see progress, we need efforts from all participants of the ecosystem.