FR, June 21, 2016 at 11:28 BST
Where do big bitcoin traders move their money? Do high trading volumes at Chinese exchanges really equal liquidity? Why is there such a spread difference on different trading platforms?
The first "Bitcoin and Ethereum Market Report" by data analysts Kaiko.com, now available for purchase, has revealed some fascinating insights into trading activity on large digital currency exchanges in first quarter 2016.
Kaiko's report is essential reading for anyone operating a business in the digital currency space, or studying the industry for policy or academic reasons.
Kaiko founder and CEO Pascal Gauthier said:
"The first half of 2016 has been one of the most important periods in bitcoin's history. Our report on digital currency exchanges will give you and your business the most useful information to make the right decisions. And there's more coming soon."
Volumes versus liquidity – why they're not the same
By analyzing trading data from the most popular bitcoin exchanges, Kaiko has determined the best methods for calculating an accurate world bitcoin price, and ranked the exchanges according to their volumes and "available liquidity".
For BTC USD trading, popular platforms like Huobi, Bitfinex and OKCoin are the top-three ranked exchanges for trading volumes. Yet only Bitfinex has high available liquidity. The other two are great for small-volume, high frequency trading, but anyone trying to move a large amount of money at once will probably shift the bitcoin price in a noticeable way.
Exchanges like itBit and Bitstamp have higher liquidity, but lower overall volumes. Kaiko's report shows how important it is to look at both datasets to record an accurate ranking.
Kaiko's ranking formula gives proportionate weighting to both volumes and liquidity, to give a truer picture of where the 'real' trading is happening.
How much is a bitcoin really worth?
Kaiko's Bitcoin Price Indices also give the most accurate calculation of bitcoin's price worldwide. It is the only company to analyze prices in bitcoin's three most common fiat currency trading pairs: US dollar, Chinese yuan and Euro.
The simple average prices released by other news and data companies also miss some subtleties. Kaiko once again dives deeper into the data, comparing prices to exchanges' order books and actual orders executed.
As well as releasing a separate index for each of the three fiat currencies, Kaiko also packages them into one USD figure to serve as the global standard.
The exchanges report also analyzes the indices' accuracy, showing there has rarely been more than 1% variation between Kaiko and the nine major exchanges, even in times of high price volatility.
Ethereum and more
The Bitcoin and Ethereum Market Report also examines another of 2016's hottest trends in digital currency: Ethereum. Ethereum's smart contracts have had their own issues, but the platform's volatile currency 'ether' is easier to understand and has been popular with traders, making millions for some who've studied its patterns.
Kaiko to release more reports
Kaiko’s exchange report is the first in a series the company is producing to give an accurate, statistics-based overview of the digital currency industry. Over the coming months, more reports will be published to examine other sectors of the bitcoin industry, such as mining.
The Bitcoin and Ethereum Market Report is available for purchase on the Bitcoin.com Store and on Airex Market. It covers the period December 1st 2015 to May 31st, 2016.
The report looks at the currency pairs of most interest to the digital currency industry at the time of publication: BTC-USD, BTC-EUR, BTC-CNY, ETH-BTC, and ETH-USD.
All underlying data from the report is also available for purchase, should anyone in the industry wish to re-crunch parts of it.
About Kaiko
Kaiko launched in 2015, with a stated goal to become the Ultimate Data Source for Bitcoin. Its mission is to organize Bitcoin’s information to help businesses succeed by providing data, insights and services.
Over the past year the company has co-operated with premier sites like Bitcoin.com and BitMEX to supply price and other network data charts, with the aim of helping bitcoin and digital currency users make better decisions.
Kaiko now has eight staff and is looking to hire more talented data professionals and developers in Paris.
For more information about Kaiko and its data services for the digital currency industry, please contact
[email protected] Â or visit
https://www.kaiko.com/