Is Cryptocurrency Trading Already a Two-Sided Market?

  • Fragmentation has affected the industry to a very little extent or not at all. And the crypto market has flourished more than we could ever expect
  • A two-sided market is extremely beneficial for those who wouldn’t be able to trade because of the lack of buyer and seller intermediary
  • Since the last decade, cryptocurrencies have grown by almost 60% both in terms of capital and volume

Bitcoin (BTC) the first-ever cryptocurrency was launched back in 2009. BTC is the very first implementation of the blockchain technology which one was created out of the need to secure and protect transactional data from tampering using cryptography. Following its inception, people could only buy a can of coke with thousands of BTC tokens. Over the decade, BTC evolved in large scale. From being a mere payment method, BTC transformed into an investment. Soon after these many altcoins were released and Ether (ETH) the native token of the Ethereum platform emerged in the second place. 

How Does Cryptocurrency Being a Two-Sided Market Benefit the Investors?

As of now, there are more than 2000 tokens and not to mention there are more than 218 cryptocurrency exchanges which in fact have created dispersal in the crypto space. However, the fragmentation has affected the industry to a very little extent or not at all. And the crypto market has flourished more than we could ever expect. However, crypto trading as we know is evolving more into a two-sided market which means that the trading platform has two parties who bid, buy and offer a trade for the benefit of both the sides. However, more recently it is being said that as the crypto space develops into a two-sided market, the liquidity will also increase. On the contrary, fragmentation would be reduced to some extent. 

Two-Sided Market Brings Access to Lots of Traders who Wouldn’t be Able to Trade Otherwise

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Liquidity plays an important role in the market because it gives the ability to the investors to move in and out of the market very frequently. As we know, BTC is a highly liquid crypto asset and there are several other cryptocurrencies which have immense liquidity. A two-sided market is extremely beneficial for those who wouldn’t be able to trade because of the lack of buyer and seller intermediary. Traders who participate in the two-sided market are free to sell or buy assets of their choice and enhance the efficiency and reduce the cost with every transaction. 

Cryptocurrency Space and the Future Finance

To some extent, cryptocurrency trading is already a two-sided market because, in order for a transaction to be successful, both the buyer and seller need to be positive over the transaction. Since the last decade, cryptocurrencies have grown by almost 60% both in terms of capital and volume. There are multiple cryptocurrencies which serve the purposes of multiple use cases. And any investment that is made towards them is an investment made for future financial systems.

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Ritika Sharmahttp://www.thecoinrepublic.com
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

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