Reasons Why Cryptocurrency Exchanges are in Positive Annual Revenue

Due to the high volatility of the Cryptocurrency market, investors and traders can either bear loss or profit. However, cryptocurrencies mostly keep a positive annual revenue.

Some of the reasons for the positive annual revenue by these exchanges include:

Revenue from listing fees

In the tokenomics of different projects, there is always some volume of the coins set aside for marketing and listing purposes. Listed projects on some top cryptocurrency exchanges cost millions of dollars after they have been checked for validity. This is one of the reasons why Ethereum co-founder Vitalik Buterin was unhappy with the development in one of the Techcrunch Conferences. At the time of writing, there were about 11 new cryptocurrencies that had been added to CoinMarketCap.

In a year, there will be an addition of around 4015 cryptocurrencies to the market. Since there are about 1700 dead coins, about 90% of the coins will probably survive, considering if 19339 are in the market. If the top-ranked centralized exchanges in the sports trading list are just 1% of the Cryptocurrencies for $5 million each, we should have annual revenue of about $882 million for the remaining 17639 cryptocurrencies.

Revenue from trading and withdrawal

Most of the top Cryptocurrency exchanges charge a buying and selling fee of 0.1%. Essentially, this implies that they would receive roughly 0.2% of the trading amount if they traded successfully. Binance had a trading volume of about $18 billion at the time of writing. In other words, by charging 0.2% on trades, they would realize about $36 million daily and $12.81 billion annually. This number will be even higher when we include the fee volume realized through withdrawals.

Conclusion

These two reasons explain why exchanges are consistently profitable, regardless of market direction.