The cryptocurrency market is dominated by a few exchanges that hold most of the liquidity and trading volume, according to a new report by Kaiko, a data provider for digital assets.
Kaiko analyzed the market depth and volume of 20 major crypto exchanges and found that the top eight platforms accounted for approximately 92% of depth (a measurement of all buys and sells within 10% of the average price) and 90% of volume.
Binance, the largest crypto exchange, accounted for more than 30% of global market depth and more than 60% of worldwide trading volume this year.
Cryptocurrency exchanges, which make up more than 90% of the market depth, are listed from largest to smallest: Binance, Coinbase, Kraken, OKX, KuCoin, Bybit, Binance US, Bitfinex.
Kaiko stated that high liquidity concentration on several exchanges has both advantages and disadvantages for the crypto industry. On the one hand, it benefits the average investor, who can access deeper and more liquid markets with lower spreads and slippage.
Analysts also emphasized that cryptocurrency volumes fell to the lowest level of the year in August, despite ETF developments and some positive news.
Kaiko attributed the low trading activity to stagnant volatility in crypto markets over the summer, with Bitcoin trading in a narrow range for months. However, the coin's seven-day volatility this week remained at three-month highs after several days of larger moves.
*Not investment advice.
