Comparison of the volumes of financial markets

The article compares the cryptocurrency market with traditional financial markets to give an idea of its place in the modern financial system.

By Prosphero Team

Comparison of the capitalization, size or turnover of financial markets is an abstract indicator, due to the different mechanisms of work and the huge number of non-accountable areas in each sector. For example, the total size of the currency market cannot be determined, since participants of the transaction process do not submit reports, and the market itself has no localization or regulatory body. Moreover, the commodity market has no clear boundaries, whereas a huge number of transactions is executed both on stock exchanges and through over-the-counter relationships.

Nevertheless, for a clear comparison, we can match the ratio of individual sectors and divisions of the financial market.

There are plenty of factors that divide the financial markets into separate sectors, but, in general, here is the most common classification of the market by the most capitalized and widespread areas:

  • currency market;
  • stock market;
  • commodity and raw materials market;
  • capital market,
  • cryptocurrency market (informally, but already considered a separate sector of the financial market).

Currency market

The international currency market takes care of buying and selling as well as currency exchange. It also deals with payment documents and contracts for the delivery of currency packages in certain volumes. The daily transactions on the currency market amount to more than $5.7 trillion. Since the currency market is over-the-counter, registration and publication of transactions and reports is not carried out, it makes it impossible to estimate total capitalization and the ratio to the world economy.

The currency market is the largest among all existing segments of the world financial market with monthly turnover exceeding $150 trillion.


Stock market

Securities of companies and state institutions of open type circulate on the stock market. The most popular stock market instruments are stocks, bonds, mutual funds, bills, checks. The futures market as an additional branch of the stock market is also a very popular direction for dealing with derivative financial instruments, such as options, futures and forwards.

The largest are the stock markets of economically developed countries. The leader in capitalization is the US stock market NYSE, while among the derivatives markets – Chicago Exchange CME. The other giants among the stock exchanges are the American exchange Nasdaq, the London LSE, the Hong Kong HKSE, the Chinese SSE.


Commodity market

The commodity and raw materials market unites all transactions for the supply of various goods, the most popular among which are energy (oil and gas), precious and industrial metals (gold, silver, iron, copper, aluminum) and agricultural products (wheat, corn, sunflower oil, sugar, salt). Exchange transactions are carried out on commodity exchanges based on futures, forward and option contracts. By volume, this segment of the market is not inferior to the capital market, only the largest oil and gas company ExxonMobil has a capitalization of over $360 billion.


Capital market

The capital market is a closed area where transactions between institutional market participants are conducted, for example, state monetary authorities, banks, insurance and credit companies, brokers and others. Bills of exchange, bonds, loan agreements, depository certificates and other financial instruments are circulating in the capital market.


Cryptocurrency market

The cryptocurrency market is gaining popularity and is expected to become one of the main and most popular sectors of the global financial market.

The total volume of the cryptocurrency market is currently estimated at $390 billion. At the same time, it should be noted that in the middle of last year the total trade volume of the cryptocurrency sector was estimated at more than $750 billion and now the market is in the expected phase of pullback. In that case further growth is quite obvious, the market capitalization will most likely set new records and continue to grow.

Every day the number of cryptocurrencies increases, as of April 2018, over 2500 cryptocurrencies have been registered, the largest of which is all known Bitcoin. The growth rate of Bitcoin over the past two years has set a significant pace for the entire sector. At the end of 2017, the price of Bitcoin was $20 thousand, while the main growth, over 1000% took place within one year.

To better estimate the size of the cryptocurrency market, we compare its capitalization with other influential structures of the world financial market.

Cryptocurrency market is still far away from reaching the size of the world’s largest stock exchanges, but the steady growth in user activity and, accordingly, trade volumes of the cryptocurrency sector gives grounds to predict its strengthening in the world financial arena.

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