coinspress.com
New data suggests that the world's largest cryptocurrency exchanges are progressively capturing a larger share of the industry's trading volume.
According to a recent report from Kaiko, the eight most prominent exchanges globally now control over 91% of market depth and 89% of overall trading activity.
Leading the pack, as it has for several years, is Binance. In 2023, Binance alone accounted for 30.7% of global market depth and 64.3% of global trade volume. When you consider the top eight largest platforms collectively, they command a staggering 91.7% of market depth and 89.5% of volume.
Binance’s market share in spot volume has notably expanded from 38.3% in 2021 to its current 64.3%, with much of this increase attributed to Binance’s zero-fee trading promotion.
Kaiko’s report underscores the concentration of liquidity within just a few exchanges, even though hundreds of trading platforms are available. Many of these platforms cater to specific niche market segments.
While market efficiency may favor liquidity concentration on a limited number of exchanges, the cryptocurrency industry places great importance on decentralization. In the context of centralized exchange (CEX) liquidity, decentralization is notably lacking.
Kaiko also highlights that due to stringent anti-crypto regulatory actions in the United States, altcoin liquidity has suffered and become heavily concentrated within three major exchanges:
Coinbase, Kraken, and Bitstamp. Kraken, in particular, has maintained its altcoin liquidity, making it a strong competitor to Coinbase. Since August 2022, Kraken has not experienced any significant drop in market depth for the top 30 altcoins, while Coinbase has seen a decrease of approximately $5 million in liquidity.