New data suggests that the world’s top crypto exchanges are consuming an increasing share of the sector’s trading volume.
Crypto insights firm Kaiko says in a new report that the world’s eight largest exchanges are responsible for more than 91% of market depth and 89% of all volume.
Just like a few years ago, Binance still leads the pack.
Says Kaiko,
“Liquidity is concentrated and has become increasingly concentrated over time. In 2023, the main exchange, Binance, was responsible for 30.7% of global market depth and 64.3% of global trading volume. The top 8 largest platforms account for a whopping 91.7% of the depth and 89.5% of the volume.
Since 2021, Binance’s market share in spot volume has increased from 38.3% to 64.3%. It should be noted that much of this increase was related to Binance’s zero-fee trading promotion.”
Kaiko says liquidity is concentrated within just a handful of exchanges, and while hundreds of trading platforms exist, most only focus on a niche segment of market activity.
“While it may be optimal from a market perspective to concentrate liquidity on just a few exchanges, the cryptocurrency industry generally values decentralization. When it comes to centralized exchange liquidity (CEX), there is little decentralization.”
Due to the anti-crypto regulatory agenda in the US, Kaiko says altcoin liquidity has suffered and become highly concentrated within three major exchanges: Coinbase, Kraken and Bitstamp.
“Kraken’s altcoin liquidity has performed exceptionally well, making it a strong competitor to Coinbase. Since August 2022, Kraken has not seen a single decline in market depth for the top 30 altcoins, while Coinbase has lost ~$5 million in liquidity.”
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
follow us on Twitter, Facebook And Telegram
Surf to the Daily Hodl mix
Featured image: Shutterstock/SvetaZi/Natalia Siiatovskaia