China Ranks High as Asia Dominates Top 20 Market Cap, Unicorns
As of January 12, 2021, almost half (42%) of the market cap of the top 20 token projects with headquarters is based in Asia, particularly China, new figures from crypto analytics firm Messari have shown. They include Tether, Cardano, BNB, EOS and Tron with a combined total value of $45.1 billion as against non-Asian projects with $63.1 billion.
Six of the top ten largest crypto unicorns in the world were also located in the region as at the end of last year, its Asia’s crypto landscape report notes, citing the likes of Bitmain, Canaan, Binance, Block.One and Ebang in the top 10.
According to Chainalysis, Asia accounted for 43% of global cryptocurrency activity, or US $296 billion in transactions as of the last 12 months ending in June 2020. The Geography of Cryptocurrency report showed that East Asia, mostly China, dominated larger trades with 90% of all volumes above $10,000. Traders from the region engage in more short-term trades over a wider variety of assets, compared to North America where the focus is more on long-term holdings of Bitcoin. Central and Southern Asia, and Oceania were ranked third in terms of retail trading, with 15-22% of transactions under $10,000.
What makes crypto tick in Asia
The report by Messari, a market intelligence company, showcases the top Asia blockchain infrastructure organizations and draws data from company information, data intelligence services, media reports, and social media.
It also identifies several factors that make Asia a strong base for crypto markets. They include high penetration of public market investing, high-technology pedigree, prevalence of WiFi, deep penetration of e-payments, propensity for gambling, and high percentage of computer-science graduates across the region.
Asia’s development as a finance hub also played a role as major cities like Shanghai and Hong Kong helped contribute to fintech progress being among the top five largest stock markets in the world to make Asian companies account for 98% of Ethereum and 94% of Bitcoin futures volumes. Other factors include that Asia accounts for 60% of the world population and is a darling of infrastructure companies across the world which are interested in tapping the growing market.
Chinese crypto exchanges have lost three-quarter volume
China in particular has one of the world’s largest crypto development communities, the largest pool of Bitcoin miners thus controlling 65% of Bitcoin’s hashrate, and is home to three of the world’s largest exchanges.
However, since 2016 when BTC-RMB (yuan) accounted for over 90% of Bitcoin volumes (excluding wash-trading), regulatory crackdowns starting in Feb 2017 has seen Chinese exchanges lose more than half of their volume (from near 100% in January 2017 to 25% in February 2017). Also, BTC-RMB has also been almost non-existent since 2017.
Meanwhile, despite the regulatory crackdown in China though, including the July 2020 report that the China Merchant Bank was freezing bank accounts belonging to users it believed to be engaging in crypto trading, the country still had some outlets for the growing industry.
They include the government’s issuance of a “Blockchain Experiment District of the Hainan Free Trade Zone” license to Huobi China after it moved its headquarters there in September 2018 as well as the launch of the Blockchain Service Network which currently integrates 24 blockchains under a standardized development environment within a government-approved technical framework. There is also the endorsement won by layer-1 blockchain protocol, Conflux, from the Shanghai and Hunan provincial governments.