Global Cryptocurrency Benchmarking Study By Cambridge-Key Findings

The findings of Cambridge Centre for Alternative Finance are both striking and thought-provoking. First, the user adoption of various cryptocurrencies has really taken off, with billions in market cap and millions of wallets estimated to have been ‘active’ in 2016. Second, the cryptocurrency industry is both globalised and localised, with borderless exchange operations, as well as geographically clustered mining activities. Third, the industry is becoming more fluid, as the lines between exchanges and wallets are increasingly ‘blurred’ and a multitude of cryptocurrencies, not just bitcoin, are now supported by a growing ecosystem, fulfilling an array of functions. Fourth, issues of security and regulatory compliance are likely to remain prevalent for years to come.


• Of all industry sectors covered in this study, the exchange sector has the highest number of operating entities and employs the most people. This is an interesting fact as the real people behind each crypto coins, the developers, are far less compared to the people who are actually running the show in exchanges.

• 52% of small exchanges hold a formal government license compared to only 35% of large exchanges. This is an alarming finding as 65% of large exchanges are running without Governent regulations. But going forward, this would reduce as Governments start legalizing crypto currency trading. This will definetely have a positive impact on the coins.

• 73% of small exchanges have one or two cryptocurrencies listed, while 72% of large exchanges provide trading support for two or more cryptocurrencies: bitcoin is supported by all exchanges, followed by ether (43%) and litecoin (35%). If you are a long term conservative investor, keep investing only in the top 5 coins by market capitalization.

• A handful of large exchanges and four national currencies (USD, EUR, JPY and CNY) dominate global cryptocurrency trading volumes. 

• Study participants reported cryptocurrency trading in 42 different national currencies. This shows that there is still lot more to come in long run.

• 53% of exchanges support national currencies other than the five global reserve currencies (USD, CNY, EUR, GBP, JPY)

• Exchange services/activities fall into three categories - order-book exchanges, brokerage services and trading platforms: 72% of small exchanges specialise in one type of exchange activity (brokerage services being the most widely offered), while the same percentage of large exchanges are providing multiple exchange activities

• 73% of exchanges take custody of user funds, 23% let users control keys


• On average, security headcount corresponds to 13% of total employees, and 17% of budget is spent on security; small exchanges have slightly higher figures than large

• 80% of large exchanges and 69% of small exchanges use external security providers; large exchanges use a larger number of external security providers than small exchanges

• Optional two-factor authentication (2FA) is offered for customers by a majority of exchanges and required for employees for most operations; small exchanges tend to
use 2FA less than large exchanges

• Exchanges use a variety of internal security measures; differences in approaches are observed between small and large exchanges

• Only 53% of small custodial exchanges have a written policy outlining what happens to customer funds in the event of a security breach resulting in the loss of customer funds, compared to 78% of large custodial exchanges

• 79% of exchanges provide regular security training programs to their staff

• 92% of exchanges use cold-storage systems; on average 87% of funds are kept in cold storage

• Multi-signature architecture is supported by 86% of large exchanges and 76% of small exchanges

• Frequency of formal security audits varies considerably between exchanges; large exchanges tend to perform them on a more regular basis

• 60% of large exchanges have external parties performing their formal security audits, while 65% of small exchanges perform them internally.

• 33% of custodial exchanges have a proof-of-reserve component as part of their formal security audit.


1. Dr Garrick Hileman is a Senior Research Associate at the Cambridge Centre for Alternative Finance and a Researcher at the Centre for Macroeconomics. He was recently ranked as one of the 100 most influential economists in the UK and Ireland and he is regularly asked to share his research and perspective with the FT, BBC, CNBC, WSJ, Sky News, and other media.

2. Michel Rauchs is a Research Assistant at the Cambridge Centre for Alternative Finance. Cryptocurrencies and distributed ledger technologies have been the topic of his academic studies for the last two years, and his Master’s thesis visualised the evolution of the Bitcoin business ecosystem from 2010- 2015 using a unique longitudinal dataset of 514 companies and projects.

Report can be downloaded from here

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