But, Huobi’s business has evolved almost as rapidly as the cryptocurrency space itself and it is no longer simply about providing a basic exchange service. That is just not good enough. And, we at Huobi have known this for a long time and have been working to provide a holistic and all-encompassing blockchain and cryptocurrency service that fits the entire disruptive ecosystem.
This is not an easy task, but a very necessary one as the technology has the power to impact and disrupt so many different sectors, but it needs help doing so. We have taken it upon ourselves to be an exchange for the future that is involved in more than just helping customers buy and sell Bitcoin.
The world is also rapidly changing, and this change looks like it will be accelerated due to the global pandemic that has made many people sit up and take note of what is fundamentally flawed with traditional ways of doing things, especially in finance.
Crypto adoption is accelerating at a rapid pace and more nation-states and regulators throughout the world are embracing digital assets as a necessary and legitimate asset class within the broader financial ecosystem. Crypto has become much less taboo than it was years ago, and the scope of crypto has also broadened greatly.
What Huobi does
At Huobi, we sit at the centre of the decentralized digital economy and we are seeing record growth across all of our business units as crypto adoption rises at an increasing pace. Amid all of this growth and ahead of our 7th anniversary, we have some big updates planned across Huobi Group, including our spot exchange Huobi Global, our derivatives exchange Huobi Futures, our institutional arm Huobi Brokerage, our mining pool Huobi Pool, and Huobi Wallet.
This year, we have seen over 908 million in average daily trading on our spot exchange, 26.54% increase compared to the same time last year. But trading volume alone isn’t what determines success. In the 7 years we’ve been around, our exchange hasn’t been affected by a major security breach and we plan to keep it that way. Just a few months ago, we launched Star Atlas, an on-chain analysis tool to monitor for illicit transactions.
Even as we see record trading volume and user activity, we continue to prioritize our users’ safety. We’re also proud that our exchange hasn’t experienced any major outages during extremely volatile moments when there are a large number of concurrent users. We’ve been able to maintain the uptime unlike some of the other major exchanges because we’ve invested heavily into our backend infrastructure.
On the derivatives side, Huobi Futures has seen nearly 80% growth average daily trading volume compared to the same time last year. Derivatives markets are most active during times of extreme volatility and we were able to use it to further improve our user experience. In an effort to protect user assets, Huobi Futures rolled out a new partial liquidation mechanism to prevent unnecessary losses in times of extreme volatility.
But we also know traders don’t just want to hedge risk; they want ways to create arbitrage. So, we followed up with the launch of coin-margined perpetual swaps, which recently topped the market in 24h trading volume, and bi-quarterly futures contracts.
Starting July 1st, Huobi Futures will conduct an option beta test for preparation of Option product launching in the near future.
On May 12th, the 24 hour coin-margined perpetual swap trading volume on Huobi Futures reached $5.47 billion, which is 4% more than that of Bitmex despite having launched their feature more than a year ago. And just in the first quarter of this year, derivatives trading volume on Huobi Futures reached $438 billion, accounting for 22% of the total market trading volume according to TokenInsights.
With Huobi Futures, our goal is to help traders leverage any market environment to their advantage while minimizing the downside risk. We do this by implementing the best risk controls in the industry, like the partial liquidation mechanism I mentioned and various insurance funds that prevent clawbacks.
With both our spot and derivatives markets, what we’re most proud of isn’t just the volume we’re facilitating. We’ve been able to provide users with a safe and reliable trading experience–with little to no downtime, industry-leading risk controls, and zero clawback since inception.
This is mostly information based around our exchange business, but still, a broader exchange business — not just simple buying and selling of Bitcoin. But, like the title says, Huobi is more than just an exchange.
One of our top-performing business lines units is Huobi Pool, which is now the 8th largest mining pool in the world by hashrate distribution. 2019 was a pivotal year for Huobi Pool, driven by strong revenue performance from our staking operations and the rapid growth of our cloud PoW mining service.
Operating revenues surged 547% in 2019, growing from $53 million in 2018 to $320 million in 2019. We’ve continued to invest heavily in the Huobi Pool ecosystem and we’re excited about the division’s continued traction as we expand the service globally this year. We’re currently preparing Huobi Pool for Ethereum 2.0 staking and have a lot of exciting things planned, like adding staking and mining services for 8 projects and node services for 12 projects.
While growth like this is always fantastic to see — both for Huobi and the market — it is more pleasing to note that Q1 institutional trader numbers this quarter are up 88 percent compared with Q4 2019 — so we can pin down just where most of our growth is coming from.
Institutional traders have taken up cryptocurrency as an asset with trading because of a number of factors, but, it is also important to look at what limitations there still are to these traders as the numbers we are seeing now are only the tip of the iceberg.
Another promising area within the Huobi Ecosystem is Huobi Wallet, which recently joined as a pilot member of an ETH 2.0 Staking Capability Programme organized by Consensys.
Other key areas of focus for Huobi in the second half of this year include Huobi Institution and Huobi Brokerage, both of which are integral to our global expansion strategy as we grow our institutional user base.
Onto the future
Huobi was founded 7 years ago with a vision to bring digital assets and financial inclusion to the masses. We envisioned an equitable and borderless economy powered by digital assets. Our exchanges now serve millions of users in over 170 countries. Both our spot exchange and our derivatives exchange top the market in terms of liquidity, trading volume, market depth, compliance, and security, all of the key factors that define a safe and sustainable trading environment. We operate localized and regulated exchanges all over the world, both directly and through trusted local partners, and we operate in full compliance with all of the necessary licenses for each jurisdiction.
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