• Cryptocurrency exchanges are making money hand-over-fist this year, despite a bear market that's gripped the market for digital currencies.
  • Crypto revenue could more than double to as much as $4 billion in 2018, according to a new report. 

Bitcoin has been stuck in the doldrums for much of 2018, but that doesn't mean every market participant is heading to the poor house. 

In fact, a recent Bloomberg News report found that crypto exchanges are set to rake in twice as much money as last year even though bitcoin is down a whopping 51%, according to Markets Insider data. In total, the market for digital currencies has shed over $500 billion since it topped $800 billion in January. 

Exchanges, which notably experienced outages and hacks as bitcoin soared to $20,000 at the end of 2017, make money by facilitating the matching of buyers and sellers. 

Citing data from Sanford C. Bernstein & Co, Bloomberg reported that crypto exchange revenues could more than double to as much as $4 billion in 2018. In 2017, they brought in about $1.8 billion. Only global cash equities businesses on Wall Street beat crypto trading revenues.

San Francisco-based Coinbase is enjoying 50% of these revenues, Bernstein found.

Exchanges may get a further boost if they're able to lure larger investors to their platforms with so-called white-glove services.

Offering these services to large institutions — from face-to-face meetings to block trades — is one way the market could mature, experts says.

Kiran Nagaraj, KPMG's leader of cryptocurrency services, said larger investors need to be supported on crypto-specific issues such as managing crypto forks — when a crypto splits into two — for them to enter the market in a serious way. Big investors, Nagaraj says, don't want to be concerned with the technicals.

"They're in the investment business," he said. "They can't hold their own private key. Maybe you'll find some that'll do it, but they are looking for market exposure. They don't want to deal with the operations."

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