Over the past 18 months, we have been reporting internally on the state of the crypto market to help our portfolio companies and their founders navigate it. One essential data source which has helped us understand macro trends is worldwide exchanges data, more specifically geographic inflows, and outflows into crypto assets across exchanges.
Our most recent analysis of trading data of the first two quarters of 2018, when compared 2017, has been fascinating to us, and for the first time, we are proud to share our findings publicly.
Asian Investors Continue to Dominate Crypto Markets
One clear trend for 2018 is the increased importance of Asian markets (Hong-Kong, China, South Korea, Japan) in daily trading volume. Those markets were representing 58.1% of total trading volumes in Q4 2017, and they now count for 77.2% (+19.1%) in Q2 2018. In contrast, US trading decreased from 30.2% of global volume in Q4 2017, at a time when the mainstream market was experiencing its first interest in cryptocurrencies, to 12.7% (-17.6%) in Q2 2018. The total trading volume decreased from $5.9bn in Q4 2017 to $4.9bn in Q2 2018 due to market conditions.
We are observing a breaking point regarding interest from Asian investors into blockchain technology startups. Asian financials hubs like Hong-Kong, Seoul, and Singapore are leading the race for the development and financing of those companies.
Korean Investors Look Outside the Bitcoin Box
Another critical insight is that Asian and more specifically Korean investors signal a more in-depth understanding and interest into newer cryptocurrencies than their Western counterparts. Between Q1 & Q2 2018, western investors were investing 53.0% of their USD, EUR, GBP into BTC.
In South Korea, investors favored Ripple in Q1 2018 with 34.3% of total KRW during the quarter. Also, EOS in Q2 2018 with 32.9% of KRW injected into the market. In comparison, BTC got a 26.4% and 18.4% market share in Q1 & Q2 2018, in the Korean market. ETH and BCH respectively represent 11.7% and 9.4% of the KRW investments during Q2 2018.
It is clear to us that the Asian market is the primary enabler of cutting-edge cryptocurrency startups’ growth. The investors and stakeholders in this market seem more attentive to the progress and development of new blockchain protocols, and are trading on this optimism.
Notes:
All the data was extracted from cryptocompare that provide trading information from more than 90 leading exchanges over the world.
