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Binance’s trading volume yet again took the lead among the 11 other centralized cryptocurrency exchanges (CEXs) tracked by CryptoCompare, ending 2022 with a 66.7% market share versus 48.7% to begin the year.
Looking at the CEXs in aggregate, trading volume dropped 46% last year, in a move that showcases the growing lack of participation throughout the ecosystem. From the high-profile failure of the Terra (LUNC-USD) blockchain in May 2022 to November’s fallout from once-mighty trading platform FTX (FTT-USD), crypto market participants have become increasingly wary of where to park their cash.
“One of the biggest signals showing the lack of participation is the drop in volatility and liquidity in the market,” according to a recent report. “On October 22, the annualized 30-day volatility of BTC (BTC-USD) dropped to 26.6% – the lowest figure since July 2020, reflecting the risk averse sentiment in the market.”
Binance maintained its top dog status, helped in part by the June launch of zero trading fees and FTX’s (FTT-USD) meltdown, even though spot trading volume on the exchange cratered 45.3% in 2022 to $5.29T, CryptoCompare noted. Binance and Bybit were the only platforms that experienced an increase in their market shares for each quarter of the year.
Coinbase (NASDAQ:COIN) finished 2022 in second place, with a 8.2% market share in December compared with 10.1% at the beginning of the year. OKX took the third slot with a market share of 5.9% vs. 10.7% at the start of 2022.
The CEXs that featured the smallest market share included Bittrex (0.1%), Bitfinex (1.0%) and Kucoin (1.5%). The market share of FTX (FTT-USD), which filed for bankruptcy in November, nearly halved to 3.3% from the start of 2022.
Binance also controlled the vast majority of bitcoin (BTC-USD) trading volume last year, CoinDesk noted, citing an Arcane Research report, ending 2022 at 92% vs. 45% to start the year.
“No matter how you look at it in terms of trading activity, Binance is the crypto market,” Arcane wrote. Bear in mind, though, it’s “not healthy to have so much of the trading volume concentrated with any one exchange,” especially in the event that the exchange fails like FTX, which was at one point the second-largest platform by trading volume.
In 2022, digital asset funds saw inflows plunge 95% in 2022, underscoring bearishness.
