Bernstein research says crypto exchanges are set to rake in twice as much money as last year

David
Ryder / Stringer

• Cryptocurrency exchanges are making money
  hand-over-fist this year, despite a bear market that’s gripped
  the market for digital currencies.
• Crypto trading revenue could more than double to as
  much as $4 billion in 2018, according to a new
  report. 

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Bitcoin
has been stuck in the doldrums for much of 2018, but that
doesn’t mean every market participant is heading to the poor
house. 

In fact, a recent Bloomberg News report found that crypto
exchanges are set to rake in twice as much money as last year
even though bitcoin is down a whopping 51%, according to Markets
Insider data. In total, the market for digital currencies has
shed over $500 billion since it topped $800 billion in
January. 

Exchanges, which notably experienced outages and hacks as bitcoin
soared to $20,000 at the end of 2017, make money by facilitating
the matching of buyers and sellers. 

Citing data from Sanford C. Bernstein & Co,

Bloomberg reported that crypto exchange trading revenues
could more than double to as much as $4 billion in 2018. In
2017, they brought in about $1.8 billion. Only global cash
equities businesses on Wall Street beat crypto trading
revenues.

San Francisco-based Coinbase is enjoying 50% of these revenues,
Bernstein found.

Exchanges may get a further boost if they’re able to lure larger
investors to their platforms with so-called white-glove
services.

Offering these services to large institutions — from face-to-face
meetings to block trades — is one way the market could mature,
experts says.

Kiran Nagaraj, KPMG’s leader of cryptocurrency services, said
larger investors need to be supported on crypto-specific issues
such as managing crypto forks — when a crypto splits into two —
for them to enter the market in a serious way. Big investors,
Nagaraj says, don’t want to be concerned with the technicals.

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