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The Aurox Terminal
Over the past decade, cryptocurrency trading has emerged from an obscure grey area phenomenon into a fully-fledged niche in the financial market.
Between 2016 and 2020, Bitcoin trading volumes increased 50 times. The trading volumes of other cryptocurrencies went from zero to billions.
This dramatic increase in trading volume can be attributed to a number of factors. First, the number of active cryptocurrency exchanges has increased substantially. In 2010, there were no crypto exchanges as Bitcoin was mainly exchanged peer-to-peer. By 2016, the number of exchanges had grown to over 100. This expansion of the exchange ecosystem has made it easier for traders to buy and sell cryptocurrencies.
The number of people holding and using cryptocurrencies has also grown substantially. In 2010, there were probably only a few thousand people using cryptocurrencies. By 2016, that number had grown to millions. This growth in the user base has helped to drive up demand for cryptocurrencies, which in turn has led to increased trading activity.
Finally, the development of non-custodial wallets and decentralized exchanges (DEXes) has made it easier for people to trade an even wider range of tokens without waiting for listings on major centralized exchanges. Just five years ago there were no DEXes and now their number across all blockchains is almost impossible to calculate.
As a result, crypto trading is now open to anyone, almost anywhere in the world.
However, retail traders are often at a disadvantage because they lack the technological sophistication and resources of professional investors. As a result, retail traders often face higher risks and can be more easily manipulated by whales (large investors).
The retails chronic disadvantage is linked to persistent problems with the way crypto trading works today.