Binance’s Roughly 50% Market Dominance Makes It Q2 Most Successful Centralized Exchange
- The crypto ecosystem is facing headwinds that have wiped off a significant proportion of its market value.
- That said, certain sections of it continue to thrive.
- Binance, for instance, has grown its market share from 39% in early Q1 2022 to 47% at the close of Q2.
Cryptocurrency exchanges have had a tough year. In particular, centralized exchanges (CEXs) have lost much of their volume to the prevailing bearish tendencies. Market data shows that CEXs trading volume shrunk from $1.3T in January 2022 to $0.9T in June 2022. Nevertheless, some CEXs, like Binance, defied the negative trend by posting market gains.
According to a CryptoMonday data presentation, Binance, the world's largest cryptocurrency exchange by volume, has seen its market dominance steadily increase over the past six months. In January 2022, it held 39% of the total crypto CEX trading volume. By June 2022, that share had increased to 47%. That growth was the biggest of the centralized exchanges.
Binance's growth at a time when the crypto market is contracting is a testament to the confidence it inspires in its users. Binance's dominance is due in part to its low fees, a wide range of altcoins, and strong security measures. Besides, it's also one of the few exchanges that allow P2P trading making it the go-to exchange for many cryptocurrency traders.CryptoMonday CEO, Jonathan Merry
The key to Binance's success has been its focus on user experience. Binance offers a simple and intuitive platform that is easy for novice and experienced traders. In addition, Binance is known for its fast transaction speeds and robust security.
Which Were the Best Performing Exchanges?
UpBit, the South Korean cryptocurrency exchange, maintained its spot as the second largest exchange by market share. The South Korean exchange had a 9% market share. It offers a wide variety of altcoins and a fiat-to-crypto gateway for the Korean Won. In addition to its rich selection of assets, UpBit also has low fees and a user-friendly interface.
Likewise, BitMart was one of the best performers in Q2 2022. The exchange grew its market share from 2% in January to 7% at the end of June. BitMart's success is due to its focus on providing a safe and user-friendly platform for users to trade digital assets.
Similarly, FTX, the third largest CEX, also grew its market share in June. The exchange's 8% dominance was a minimal leap from the 5% it held in most of Q1 2022. The exchange is known for its innovative features, such as lightning-fast trades and advanced charting tools.
The Worst Performers
OKX was the worst performing of all the top CEXs in 2022 after closing June with a market dominance of just 5%. That significantly dropped from the 14% held at the year's start. OKX's struggles are mainly due to its low liquidity, which makes it challenging to buy and sell large amounts of cryptocurrency. Some of the exchange's customers have complained of poor customer service and losing their funds.
Crypto.com, too, has been on a downward spiral since early January. Its market share has shrunk from 8% to 2%, and it doesn't show any signs of recovering. Crypto.com was one of the most promising cryptocurrency platforms, but it has failed to live up to expectations.
In January, hackers gained access to 400 Crypto.com accounts and made away with nearly $40M worth of crypto. That and the current outages the platform has experienced are to blame for its poor showing.