Sanford C Bernstein & Co analysts have produced a report signaling a revenue increase in cryptocurrency exchanges. Estimations are in the ballpark of USD 4 billion this year.

The published study, titled ‘Crypto Trading – the Next Big Thing is Here?’, found that despite the excess of FUD headlines and reports such as CCN’s ‘Crypto Bloodbath‘ following the market’s recent poor performance, crypto trading is expected to provide massive gains for exchanges.

Key findings

The expected increase in revenue as drawn from the analysts claim is that a significant number of investment opportunities will emerge for tradition firms as the crypto-asset class matures and institutional demand grows. These opportunities may pertain to custodial, asset management and market-making services.

US-based exchange Coinbase is estimated to reach an unbeatable level of popularity because of its backing from traditional banks, exchanges, and venture capital. The research estimates Coinbase to be responsible for 50% of the revenue generated.

According to the report, Wall Street players entering the market including Goldman Sachs and JPMorgan Chase are seen as pacesetters for the changing tides. While most mainstream financial institutions are reluctant to embrace cryptocurrencies, the research shows that a change is imminent and with it will come the enhanced profits for exchanges.

Closer to widescale adoption

Considering that revenue is cited as doubling in this year, it seems the Bernstein researchers expect traditional financial institutions to enter the market much faster than most pundits. If the recently approved Exchange Traded Note (ETN) Bitcoin Tracker One is anything to go by, they may well be right.

The ETN is a tool for institutional investors to exchange Bitcoin on stock trading platforms under the symbol CXBTF. Many see this as the next step in receiving an ETF approval.


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