Cryptocurrency trading: what is a crypto trader?

 Cryptocurrency trading has been a part of the financial landscape for a few years now, giving life to a new figure in the markets: the crypto trader. What is a crypto trader? What is his activity? How many of them can be counted? On which platforms do they trade? In which countries? What advice could we give to those who also want to become crypto traders?

Discover in our analysis of the study "Active crypto traders across the globe" of June 2019, conducted by the international management consulting firm specializing in financial services Chappuis Halder & Co. our answers to all these questions.

Cryptocurrency trading: what is a crypto trader?

Studies on crypto traders come and go and... are not alike. For example, the latest report published by the Cambridge Center for Alternative Finance concluded that there were more crypto traders than there had ever been, considering that more than 35 million of the 139 million users of a cryptocurrency account were trading on a regulated basis and therefore could be considered crypto traders.

In another study, Datalight counted twice as many crypto traders with 68.5 million crypto traders instead of the 35 million that the Cambridge report counted.

These notable differences come from the fact that no study until now clearly defined the definition of crypto trader, and especially did not share the same. It is therefore difficult to count the number of people practicing an activity if the practice of this activity has not been clearly defined. This is what Chappuis Halder & Co. proposed to do.

According to them, can not be considered crypto traders, the users of virtual currency. The title of crypto trader can only be given to investors who use virtual currency exchange platforms. It is not enough to own cryptocurrencies to be a crypto trader, it is also necessary to make transactions on dedicated platforms.

50 million crypto traders present on virtual currency platforms

This analysis, which challenges the way in which the number of crypto traders in the world has been calculated until now, proposes another method based on the analysis of exchange platform data involving both a study of transaction volumes per currency on platforms and a study of the number of unique visitors per platform.

The intersection of these two variables allowed us to determine and confirm the following figures: 50 million crypto traders are present on the platforms. If we also count the traders who operate outside of cryptocurrency exchange platforms, there are 56 million crypto traders.

Several parameters were also taken into account to refine the results: unique visitors, search engine market share, downloaded Android / IoS apps, GDP, penetration rate, etc.

Cryptocurrency exchange withinside the world

Of those 50 million cryptocurrency traders, over 35% are American. In fact, the United States has 17.2 million crypto traders. According to estimates by Crypto Market Journal, about 5% of Americans hold bitcoin. 11.9 million crypto traders are based in Europe. Finally, Japan and South Korea have similar levels of traffic (7.9 and 5.8 million).

Chappuis Halder & Co.'s "Active crypto traders across the globe" study shows that the cryptocurrency market is less centralized than previous studies have suggested. Although the United States is by far the country with the most virtual currency traders, Russia (1.01 million), Brazil (0.8 million), Europe, Japan, and Korea also have many crypto traders.

Some countries even have a particularly high penetration rate such as Poland (8.2% penetration rate), New Zealand (5.3%), Malaysia (4.9%), and South Africa (3.3%). By comparison, the U.S. has a penetration rate of 4.65 percent and Switzerland has a penetration rate of 2.02 percent. South Korea has the highest penetration rate (9.7%).

Note that the total volume of Bitcoin exchanges in Europe (44 countries) is equal to the volume of exchanges in Japan (17% and 16%). The total trade volume in the US worldwide is over 50%. Other countries (outside the US and Europe) account for 12.6%.

Of note: each crypto trader holds an average of 0.04 BTC. The big winners in Bitcoin ownership are Switzerland with 0.08 BTC held on average, then Norway with 0.07 BTC held on average, and finally, the US with 0.06 BTC held on average.

The different cryptocurrency platforms for investing

There are many cryptocurrency buying and selling platforms. These include Kraken, Bitstamp, Poloniex, and Coinbase, which has the largest number of unique users (18.7 million).

In fact, nearly 1 in 2 active crypto traders (47%) use the Coinbase Exchange platform to buy, sell and manage their crypto-currency portfolio. The Coinbase platform recently announced 30 million open accounts and over 20 million customers served.

Chappuis Halder & Co.'s "Active crypto traders across the globe" study confirmed that Coinbase has about 20 million crypto traders (18.8%). In other words, each trader has an average of 1.5 accounts.

It is also possible to invest in cryptocurrencies with some online brokers via derivatives that allow you to position yourself up or down, with or without leverage, on a multitude of underlying including many virtual currencies.

Our advice to cryptocurrency investors

Do you want to get into cryptocurrency trading too? First, you will need to know what a virtual currency is in general, what the advantages and disadvantages of investing in a cryptocurrency are, and what factors contribute to the value of a cryptocurrency.

Next, you will need to have a good understanding of the technology that the cryptocurrency you are planning to invest in is backed by (the blockchain most often). In order to have accurate and reliable information, it is best to opt for a relatively transparent cryptocurrency whose developers frequently release information. Cryptocurrencies are particularly volatile assets that present a significant risk of capital loss. It is therefore advisable to invest only amounts that you are prepared to lose. Finally, beware of crypto-currency scams which are legion on the web. Be very careful when choosing your broker and make sure that it is not on the AMF's blacklist.

All our records are, via way of means of nature, generic. It does not take into account your personal situation and does not constitute in any way personalized recommendations for the realization of transactions and cannot be assimilated to a financial investment advice service, nor to any incitement to buy or sell financial instruments. The reader is solely responsible for the use of the information provided, without any recourse against the publishing company of being possible. The publishing company of cannot be held responsible for any error, omission, or inappropriate investment.

Post a Comment