The Bulk of Worldwide Cryptocurrency Trading is Concentrated on Eight Exchanges, According to Kaiko
An analysis conducted by Kaiko has revealed that just eight digital currency exchanges handle 90% of the worldwide cryptocurrency volume of trading, 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 digital currency market depth worldwide since the start of 2023, and it is in charge of more than 64% of worldwide cryptocurrency trading volumes. Nonetheless, market depth for Binance has declined by almost 12% since 2021. Other exchanges that dominate the cryptocurrency market include Coinbase, Kraken, OKX, KuCoin, Bybit, Binance. United States, 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 cryptocurrency trader.
The concentration of worldwide cryptocurrency trading on just eight exchanges raises concerns about liquidity shortages and probable points of failure in the market. Although 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 cryptocurrency market, especially after experiencing a whole lot of decline in volume of trading numbers in August 2023.
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