Historical Data Shows Crypto Exchange Dynamics Influenced By Regulatory Changes

To investigate the effects of new regulation on the cryptocurrency market, as well as the extent virtual asset service providers will be affected by the changes, the Crystal™ Blockchain analytics team has issued an updated report on the historical international flow of bitcoin between cryptocurrency exchanges.

The 33-page report includes a detailed analysis of bitcoin transactions between 436 international exchanges from 70 different countries from 2013 through Q1 2020. The entire report can be found here: International Bitcoin Flows Analytics Report by Crystal for Q1 2020.

The objective behind this research is to help show how the bitcoin market has changed over three evolutionary stages of cryptocurrency exchange regulation, as well how it has reacted to external factors such as global financial fluctuations and increasing digital asset regulations. The report reviews these trends in light of the events of Q1 2020, as well as compared to historical data.

Following the announcement last year by the G20 that they would be supporting guidelines implemented by the Financial Action Task Force (FATF) for cryptocurrency exchanges, as well as the recent 5th Anti-Money Laundering Directive (5AMLD) digital asset legislation put in place by the EU (many of which are G20 members), this report mainly focuses on G20 transfers.

Key Findings:

In Q1 2020, the total volume of bitcoin directly transferred between exchanges was $15 billion, almost twice as large as the $8.2 billion transferred in the period Q1 2019.

Due to its low correlation with financial indexes, bitcoin is showing itself to be more resilient to economic downturns than traditional stock exchanges, according to historical data in the latest report from Bitfury’s Crystal™ Blockchain analytics division.

The volume share of all bitcoin transfers between exchanges from the G20 group decreased by almost twice the amount between 2013 and Q1 2020. This is likely due to regional and global regulation such as the introduction of “travel rule” guidelines by the FATF and 5AMLD implementation.

By the end of Q1 2020, the countries with the largest number of registered exchanges were the UK, Hong Kong, Singapore, and the US.

Seychelles transferred about 37% of the total volume of bitcoin exchanges in Q1 2020, despite the UK having more exchanges in total. This high volume is likely due to the fact that larger exchanges like Binance and Huobi are registered in Seychelles.

Nearly 17.7% of all global exchanges surveyed do not have countries of registration, or this information is not publicly available as of yet.

To see this data on an interactive map and to download the full report, please visit our Bitcoin Flows Analytics Map webpage on the Crystal Blockchain website.