Exchange tokens have outperformed BTC and other major cryptocurrencies in the course of 2019, and the expectation is that the tokens of up and coming exchanges will demonstrate further growth. Despite the overall bearish market in the last quarter, the market cap of exchange tokens has increased by 255% from the start of this year. In this series of articles, we will discuss the purposes of exchange tokens, what are IEOs, why exchanges need them and the reasons why exchange tokens have been so successful.
Major Exchanges have set the trend for IEOs
Bitcoin’s been having a fantastic year thus far, with over 190% growth. However, the exchange tokens have managed to outperform the King of Cryptocurrencies. Major exchange tokens, such as Binance Coin, Huobi Token and Kucoin have constantly been in the list of the Top 15 tokens this year (according to OnChainFX data). In fact, all of them — including the latter ones — have defeated BTC, as Huobi Token has grown by nearly 380% and KuCoin by over 290% — great performance in the overall bearish market. The exchange tokens have also outweighed the BCH, XRP, and ETH.
The great rise of the IEOs and the changes in the cryptocurrency market have become well-known facts in the crypto-community. Major exchanges have launched their own tokens, whereas the up and coming exchanges such as EXMO and EMIREX have either laid a firm base or announced their IEOs. Although there are similar characteristics shared by all IEOs and exchange tokens, each one is unique in its own right and comes with a set of benefits for the users.
The first major exchange to present a native token was Binance. The Binance Coin (BNB) has so far been the leader in terms of market cap ($2.7 billion) and a top-performer. The native token of Binance has been ripping the markets apart. To date, nearly a 460% increase has been achieved by BNB, which has gone from $6 to $32,50 in less than a half-year. On the other hand, BTC has delivered a 130% growth during this period.
The market cap of exchange coins and the trading volume seem to be strongly associated. Exchange tokens appear to be useful for increasing volume growth on the related exchange.
In the upcoming publications, we will examine the reasons behind the exchange tokens’ super performance and the ways, the exchanges make multiple asset value proposals. Part 2 is about IEOs. Stay tuned!
Digital Commodities Asset Exchange in the Middle East, focusing on tokenised commodities. Licensed and Regulated. Tokenisation advisory.