Binance, the world’s largest cryptocurrency exchange, remains the leader in the space, ending 2022 with a 66.7% market share, compared to 48.7% at the start of the year.
Binance accounted for 66.7% of all trading volume on centralized crypto exchanges in the last quarter of 2022, following the collapse of one of its biggest rivals, FTX, according to a report by Cryptocurrency. In comparison, the platform has a market share of 48.7% in early 2022.
Binance’s market share increase came even as the platform saw its spot trading volume drop by more than 45% amid a general decline in the market. “OKEx and Coinbase held a market share of 8.58% and 8.50%, respectively, with a turnover of $813bn and $805bn,” the report said.
A total of 11 exchanges were analyzed in the report, including Binance, FTX, Coinbase, Kraken, Bitfinex, Bittrex, Bybit, Crypto.com, Huobi, Kucoin, and OKX. Of this list, only Bybit and KuCoin saw trading volume increase in 2022. Bybit also sees its market share increasing in 2022.
“The increase can be attributed to consolidation in the industry as overall volumes trend downward, with exchanges competing for lower volumes,” the report said.
In fact, Binance’s move to remove trading fees for BTC and ETH pairs in 2022 coincided with a huge jump in trading volume — so much so that it exceeded the total volume for 13 other exchanges, including Coinbase, FTX, Huobi, OXX and more. It’s over More by mid-September.
US-based crypto exchange Coinbase was the second largest platform in terms of market share at 8.2% by the end of 2022, up from 10.1% at the beginning of the year. And behind Coinbase was OKEx, which saw its market share drop to 5.9% in December, versus 10.7% at the start of 2022.
Meanwhile, the cumulative trading volume on centralized exchanges is expected to decline by 46.2% in 2022. Falling crypto prices and decreasing volatility are some of the major factors affecting the decline in trading volumes. The report said:
“One of the biggest signs showing a lack of participation is a drop in market volatility and liquidity. On October 22, BTC’s annualized 30-day volatility dropped to 26.6% – the lowest figure since July 2020, indicating risk aversion. There is sentiment in the market.”
The report called 2022 a “transformational year” for the digital asset space, with events like the collapse of FTX and Terra highlighting the industry’s shortcomings. On the other hand, such events show the benefits that DeFi can bring through its transparent and permissionless infrastructure, the report said.
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