The Majority of Global Crypto Trading is Concentrated on Eight Exchanges, According to Kaiko
An analysis conducted by Kaiko has revealed that just eight cryptocurrency exchanges handle 90% of the global crypto trading volume, with as much as 92% of the market depth held by these exchanges. Binance, led by Changpeng Zhao, has accounted for over 30% of the cryptocurrency market depth worldwide since the start of 2023, and it is responsible for more than 64% of global crypto trading volumes. However, market depth for Binance has declined by almost 12% since 2021. Other exchanges that dominate the crypto market include Coinbase, Kraken, OKX, KuCoin, Bybit, Binance.US, and Bitfinex. The concentration of liquidity in a few exchanges is attributed by Clara Medalie, Kaiko’s director of research, to natural market forces that have favored the average crypto trader.
Hot Take
The concentration of global crypto trading on just eight exchanges raises concerns about liquidity shortages and potential points of failure in the market. While it may benefit average traders by reducing volatility, the high concentration could disrupt the price discovery process. Kaiko’s report serves as a reminder of the challenges faced by the crypto market, especially after experiencing a significant decline in trading volume numbers in August 2023.
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