While the Crypto Winter may be lingering with us into the spring, crypto exchanges are doing just fine. According to CoinMarketCap, there are now 255 major crypto exchanges. That’s a notable increase from a year ago, when there were 208.
A booming exchange industry sounds like a positive, but we can do with fewer exchanges for cryptocurrencies to establish themselves as a dominant force in the global financial system.
For crypto to truly thrive, the ecosystem needs only five or six exchanges — and certainly no more than a dozen — in the long run. Here’s why.
Growing Crypto’s Market Cap Will Be Possible With Fewer Exchanges
To get a sense of crypto’s exchange problem, consider the ratio of crypto exchanges / crypto market cap compared to equities exchanges / total equities market cap.
Today’s 255 major crypto exchanges are home to about $175 billion worth of cryptocurrencies (total market cap). Distributed evenly, this amounts to $686 million in cryptocurrencies per exchange. In equity markets, 60 major stock…