Based on data from CoinMarketCap, it was observed that in Q2 2023, the total spot trade volume contributed by 20 crypto exchanges amounted to $1.67 trillion, representing a significant decline of 36% compared to the previous quarter.
Despite facing legal challenges, Binance remains the dominant force in the market, accounting for 59.99% of the total spot trading volume. This indicates that Binance continues to hold a substantial share of the crypto community’s attention, despite the overall slowdown in market activities.
The market slowdown can be attributed, in part, to the increased withdrawal activity following the SEC lawsuit on June 5, as noted by CoinMarketCap. However, the top five exchanges, including Binance, maintain their prominence in the crypto space, accounting for 85% of the spot market activity. Additionally, major players like Binance, Coinbase, and Kraken consistently exhibit high average liquidity scores of over 700, indicating minimal slippage during trades. It is worth mentioning that a perfect liquidity score is 1000.
The report draws parallels between the current trade volume and the market conditions observed during the recovery phase after the FTX crash.
Regarding the decentralized exchange (DEX) market, the research highlights Uniswap’s dominance, capturing a market share of 57.5%. The monthly volume of Uniswap is reported to be comparable to Coinbase’s spot volume. The top three DEXs, including Uniswap, Pancake, and Curve, collectively accounted for 82% of the total DEX market in the first half of 2023.
However, the report indicates that centralized exchanges remain the preferred choice over decentralized counterparts due to factors such as regulatory developments and lower gas fees.
While Ethereum (ETH) had traditionally held the majority of decentralized trading volume, an interesting trend in Q2 was the rapid acceleration of BNB to catch up.
In addition to the market insights, there is news of trouble brewing in major exchanges. Gemini, founded by Cameron and Tyler Winklevoss in 2014, has filed a lawsuit against Digital Currency Group (DCG), alleging fraud. The legal action between these two companies has come as a surprise to the cryptocurrency community.
Furthermore, Coinbase and Binance are currently involved in a legal battle with the SEC, which accuses both exchanges of operating as unregistered security exchanges and other alleged violations.