Binance Dominates the Ranks as Top Exchanges Record Highest Market Share Since 2017

Amid looming uncertainty of the macroeconomic financial ecosystem, top exchanges like Binance managed to steal the show in terms of volumes and consumer interest.

August saw volatility returning to the cryptocurrency markets as the top crypto assets by market cap — Bitcoin, and Ethereum failed to break above key resistance levels. BTC and ETH prices closed at $20,050 and $1,554, falling 14.0% and 7.47% over the last month respectively.

Notably, the effects of the market’s curbed momentum, and volatility was visible in the spot trading volumes on centralized exchanges which jumped 36.8% to $1.91 trillion in August.

A more volatile and unpredictable environment left investors and traders more cautious which could be seen in their investing patterns and psychology throughout last month. A CryptoCompare report highlighted that Binance, one of the world’s leading cryptocurrency exchanges, captured 55.1% of the spot volume market share in August as top-tier exchanges maintained their market dominance.

Binance dominates the market share

Data highlights that over the last month, total spot trading volumes rose 36.8% to $1.91 trillion as investors continued to take advantage of the volatility. The top-tier exchange spot volumes increased 41.6% to $1.80 trillion while lower-tier spot volumes decreased 12.3% to $108 billion.

In fact, the market share was largely captured by the top exchanges that represented 94.3% of total spot volume. This was the highest market share captured by top-tier exchanges since November 2017.

Daily Top Tier Spot Exchange Volumes | Source: CryptoCompare

Binance remained the largest top-tier spot exchange by volume trading $438 billion, followed by Coinbase trading $58.3 billion, and AAX trading $54.9 billion. Continued domination by Binance presented the higher activity of the retail crowds amid prolonged periods of volatility.

Historical Monthly Top-Tier Spot Volume – 3 months | Source: CryptoCompare

Is uncertainty still plaguing BTC market?

In August, as BTC and ETH failed to cross above their respective key resistance levels at the $24,500 and $2,000 mark, investors continued to rely on the top exchanges amid uncertain macroeconomic conditions. This volatility was reflected in the trading volume as spot trading on centralized
exchanges jumped 36.8% to $1.91 trillion.

Bitcoin spot trading into USDT increased by 15.4% in August to 10.1 million BTC as investors continue to prefer safety under the current uncertain macroeconomic conditions. BTC spot trading into BinanceUSD (BUSD) and USD rose by 0.44% and 0.33% to 2.14 million BTC and 1.31 million BTC respectively.

BTC Netflows | Source: IntoTheBlock

When looking at BTC’s net flows on aggregated exchanges it could be further said that uncertainty still plagued BTC investors as net flows remained largely positive throughout the month of August. Net flows are positive when more funds are entering than leaving exchanges and vice versa.

Derivatives volume at yearly low

As spot trading volumes rose 36.8% to $1.91 trillion, the derivatives trading volumes across all centralized crypto exchanges increased 1.91% to $3.16 trillion, registering its first rise in three months.

A rise in the spot trading volume led to a 9.59% decline in derivatives market share to 62.4%, a yearly low for the metric. Historically, the derivatives market has dominated crypto trading volumes.

The fall in the derivatives market share reflects the uncertain macroeconomic conditions with rising inflation rates and a looming threat of recession. The price action following the Fed reiterating its stance to control inflation suggests that there was a strong sell-off from investors’ spot holdings.

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