The group of exchange coins received little attention in 2024, but with the rising price of Binance Coin (BNB) and increased trading volume from retail investors, the utilities provided by exchange coins could propel this altcoin group to accelerate.

Here are the observations from BeInCrypto on the data that clarifies the above trend.

Exchange Coins Showed Impressive Performance in the First Week of December

According to CoinMarketCap data, the major coins and tokens of the leading centralized exchanges (CEX) in the market have seen a significant surge. The capitalization of this Altcoin group has reached $130 billion with a daily trading volume of around $6 billion. Of this, the capitalization of BNB accounts for 1/3.

The tokens of other CEXs such as Crypto.com (CRO), OKX (OKB), Bitget (BGB), Kucoin (KCS), and Gate (GT) have all recorded an average increase of 10%. Although this growth rate is still modest compared to many other Altcoin groups, it could just be the beginning. A recent Kaiko report indicates that the trading volume of exchange Altcoins has increased significantly.

Kaiko stated that since the collapse of FTX, the exchange coins have received less attention and the trading volume has been cautious. But the volume has changed completely in November, especially the coins of Crypto.com and BitGet.

Reasons to Predict Exchange Coins Could Accelerate in the Near Future

To explain the rise in price and trading volume of CRO, Kaiko cited two main drivers:

"CRO of Crypto.com reached a trading volume of nearly $4 billion in November, more than three times the volume during the March surge and the highest since March 2022. What is behind the resurgence of these token? It may be tied to two main drivers, trading fee incentives and regulatory changes in the US - the latter of which could be a key driver of exchange competition in 2025." - Kaiko Report explanation.

Kaiko's reasons may also be the driving forces behind the price movements of the coins/tokens of other exchanges.

The latest data from CCData shows that the spot trading volume on CEXs has increased by 124% month-over-month, reaching $3.43 trillion. As the market sees more and more retail investors, and they want to optimize their benefits when participating in trading activities, they will tend to prioritize buying and holding the coins/tokens of the exchanges. A recent analysis from BeInCrypto shows that the trading demand of retail investors has increased significantly in the past 4 years.

However, one of the major risks of investing in exchange coins/tokens is that bad news about the exchange can lead to a sharp price drop. For example, the recent rumor that the CEO of HashKey Global had officially resigned, causing a large number of employees to also leave the company, led to a 25% drop in the price of HSK.

Also Read: Top 10 Cryptocurrency Exchanges for Beginners in 2024

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