One Big Winner So Far This Year? Exchange Tokens

By Charlie Custer

There’s no doubt that Bitcoin, which is up 192% in 2019, is having a great year. But there’s another class of token that’s been having an even better time: exchange tokens.

As of July 16, Binance Coin, Huobi Token, and Kucoin Shares are all among the top fifteen tokens by year-to-date return so far in 2019 (according to data from OnChainFX). The former two are actually beating Bitcoin — up 379% and 292%, respectively — and Kucoin shares is up 142%. All of these exchange tokens are significantly outperforming major altcoins like Bitcoin Cash, Ripple, and Ethereum.

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We’ve written about why Binance Coin is doing so well, and the reasons for the success of Huobi Token and Kucoin Shares are probably similar. All three tokens confer rewards for platform usage (Binance Coin and Huobi Token provide fee discounts, Kucoin Shares pays a dividend based on transaction fees). 

The highest-returning exchange tokens, Binance, and Huobi, have some additional similarities. Both have token destruction schemes that reduce the total number of available tokens over time. And both tokens have additional selling points that grant token holders access to “events” like new token offerings. 

The success of exchange tokens so far in 2019 may suggest that investors are increasingly interested in tokens that can offer immediate, tangible benefits. It will be interesting to see whether their runaway success inspires more mainstream exchanges to issue their own tokens, and if they do, whether investors will show a similar level of interest in them.

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