Top Exchanges Claim Lion’s Share of Cryptocurrency Liquidity
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.
READ MORE: Bitcoin’s Latest Dip: Is It the Calm Before a Storm? – Bloomberg Expert Weighs-in
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.