Tanking cryptocurrency prices stink for investors, but they also reek of opportunity for exchanges and market makers getting a cut from the buying and selling of digital coins.
Analysts at the Sanford C. Bernstein research firm, in “Crypto Trading — the Next Big Thing is Here?”, predict exchanges’ trading revenue could more than double to $4 billion from the $1.8 billion in fees collected in 2017, Bloomberg reported, citing Bernstein’s note. Last year, crypto revenue was about 8 percent of that seen on traditional exchanges.
If traditional firms continue to avoid these assets, Bernstein said, it could leave the Coinbase exchange, which it estimates has 50 percent of the crypto transaction revenue pool, with an “unassailable competitive position.”
Wall Street firms have generally been reluctant to get involved with cryptocurrency because of the regulatory uncertainty and price volatility. Analysts don’t expect that to change anytime soon. Read more here.