As the big keep getting bigger, the consulting firm offers insights into how smaller crypto exchanges can thrive despite the competition.
The number of people trading cryptocurrencies on Robinhood Crypto jumped from just 1.7 million in the fourth quarter of 2020 to a staggering 9.5 million in the first quarter of 2021.
Massive rally in Bitcoin and other cryptocurrencies in recent months has grabbed the public interest. People who stayed away from cryptocurrencies until a few months ago are now learning about them and trading crypto assets.
It gives crypto exchanges – both big and small – an opportunity to attract hundreds of millions of new customers. In the technology sector, big players keep getting bigger and the small ones often get acquired or get crushed.
But if the smaller crypto exchanges learn from the market leaders and play their cards well, they could very well join the big league in a few years.
Big lessons for small players
Growth marketing and consulting firm BDC Consulting studied the strategies of the world’s top 30 largest crypto exchanges since 2018 to chart out their evolution. It’s a treasure trove for smaller crypto exchanges and other platforms in the same space.
According to the study, three of the world’s largest exchanges handled 76.99% of the global crypto trading volume in 2020, up from 55.51% in 2019. The trend looks intimidating. However, a closer look at data suggests it could be a positive sign for the smaller players.
The crypto ecosystem is still in its infancy with a long runway for growth. The chart above shows that the players at the top keep changing depending on how aggressively they expand their customer base.
Houbi was nowhere on the list in 2018 but became even bigger than Binance in 2020. In contrast, Bitfinex skidded from 14.38% market share in 2018 to just 0.69% in 2020.
According to the study, leading players such as Huobi and Binance offer their services in more than a hundred countries. They haven’t kept themselves restricted to just a few markets. Huobi has aggressively expanded to more than 130 countries while Binance operates in over 180 countries.
Focusing on a single market could shut a company out of the other markets. BDC Consulting found that direct traffic accounts for 71% of all visits to the websites of crypto exchanges. Most people bookmark the websites they use or the web browser auto-fills it when people type the first few letters.
Since only 11.5% of traffic comes from search engines, it’s imperative for crypto exchanges to quickly acquire as many users as possible and provide them the best experience. That’s how you get the people who join the crypto revolution in the coming months and years to directly visit your site.
Speed and search engines
The study found that only three out of the top 30 crypto exchange websites had a high loading speed on both mobile and desktop. Since loading speed is a key element of user experience, Google (NASDAQ:GOOGL)boosts rankings for websites that load faster. Google’s PageSpeed Insights tool allows developers to analyze the website load speed.
Though search engines account for only 11.5% of traffic to the top 30 crypto exchanges’ websites, it’s still a significant amount considering the total number of crypto-related search queries could be in hundreds of millions.
BDC Consulting said that only 34% of crypto exchanges have properly optimized their websites for search engines. The rest are depriving themselves of the opportunity to acquire new customers.
Insights on Social Media
Twitter (NYSE:TWTR) is the primary channel of communication for all the leading exchanges. On average, a crypto exchange had 196,000 followers on Twitter at the end of 2020. The engagement rate on Twitter increased slightly from 0.07% in 2018 to 0.08% in 2020.
The top 30 crypto exchanges were posting 3 times a day on Twitter.
Facebook (NASDAQ:FB) was another preferred medium of communication for the exchanges. Binance and KuCoin were posting 7 times a day on Facebook in 2020. Others were posting only once or twice a day.
BDC Consulting added that the posting frequency depends on whether you have something newsworthy to say. Bombarding the audience with irrelevant content is a terrible social media strategy.
Crypto exchanges have doubled down on YouTube. They were posting only 2.3 videos per month on average in 2018. But the posting frequency has almost doubled to 4.3 videos a month in 2020. Also, only three of the top 30 exchanges had listed their YouTube channels on their website in 2018. Now the number is 16.
Here’s the year-on-year growth in their subscribers:
However, the engagement rate on YouTube has declined from 0.51% in 2018 to just 0.19% in 2020.
You can access the full version of the study report here.
About BDC Consulting
BDC Consulting is a growth marketing and consulting agency. It has been working with fintech and crypto companies since 2011 to help them with branding, growth, scaling, and public relations.
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