Bithumb Became the Largest Cryptocurrency Exchange Through ‘Incentivized Trading’

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South Korean cryptocurrency exchange Bithumb has recently become the number one cryptocurrency exchange by trading volume as it has been trading an average of $1.2 billion per day. Worryingly, its number of visitors has been dropping.

According to CryptoCompare’s November Exchange Review, Bithumb’s average daily trading volumes surged by over 280% from 323 million USD (Sept/Oct) to 1.2 billion USD (Oct/Nov) while the exchange’s unique daily visitors decreased by almost 20%.

Bithumb isn’t the only exchange seeing these sorts trends. Per the report, Coinbene and CoinTiger have shown similar trends, as shown in figure 19, their volumes have increased despite decreasing traffic.

CryptoCompare Exchange Review Bithumb

Bithumb’s case is different, however, as it became the largest crypto exchange by volume, while having little over 5,000 users a day. In comparison, Binance had 67,200 unique visitors per day, and an average daily trading volume of $600 million.

CryptoCompare Exchange Review Bithumb

Per the report, Bithumb’s volume improved so drastically that it saw the trading volume of BTC into Korean Won (KRW) surge 288% since last month, while the volume of BTC into USD and JPY dropped 16% and 30%, respectively. This means BTC/KRW went from about 10% of BTC’s total trading volume to fiat, to 46%, as shown in Figure 7, making KRW the largest fiat pair to Bitcoin last month:

CryptoCompare November Exchange Review

Bithumb’s trading volumes surged after Singapore-based BK Global Consortium acquired a controlling share in the exchange for $350 million. The organization reportedly implemented a “series of airdrop competitions, raffles, rebates, and other programs” to bring in non-Korean users.

Per CryptoCompare’s report, Bithumb also implemented the controversial trans-fee mining model, as certain users who managed to trade specific trading volumes were later rewarded with “Bithumb Cash.” Trans-fee mining exchanges often have, as previously reported, thin order books and low traffic compared to their relatively high volumes.

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charmmytashi BRB +2.0 (≈ $ 1.0)

Bitrabbit will be bigger than Bithumb.

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@TimothyL #1

Bitrabbit will be bigger than Bithumb.

 Definitely 

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@charmmytashi #2

@TimothyL #1Bitrabbit will be bigger than Bithumb. Definitely

 smileok_hand

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@charmmytashi #2

@TimothyL #1Bitrabbit will be bigger than Bithumb. Definitely

 Thanks for your kindly rewards. 

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Support!

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