Leading centralized exchanges extend market share in 2022. | Crypto Mountains
Leading centralized exchanges extend market share in 2022.
The “top-tier” exchanges, as ranked in a report by CryptoCompare, increased their market share to 96% in February 2022.
The top centralized cryptocurrency exchanges have reached all-time highs for market share this year as the trading volume in crypto consolidates onto the platforms of only a few trusted companies.
These named “top-tier” crypto exchanges have increased their market share from 89% in August 2021 to 96% in February 2022, according to data collected by United Kingdom analytics company CryptoCompare published on Monday.
The firm analyzed over 150 active centralized exchanges, ranking them on security, number of assets available, regulatory compliance, Know Your Customer checks and more, grading them from a top score of AA to a low of F, with “top tier” receiving a grade B or above.
A total of 78 exchanges received a “top tier” grade, with Coinbase, Gemini, Bitstamp and Binance as the only four to receive the highest AA grading.
The report revealed that top-tier exchanges traded a total of $1.5 trillion in February 2022 compared with $62 billion in the “lower-tier” exchanges. CryptoCompare claims that this metric shows “both retail and professional traders are moving to lower risk exchanges.”
Consolidation of exchanges has happened through both exchange closure and acquisitions from other, larger exchanges. Top crypto exchanges eyeing overseas expansion sometimes acquire already licensed smaller exchanges operating in the country of interest, as was the case with FTX’s acquisition of the Japanese Liquid Group exchange on February 2, 2022.
The firm reported that since June 2019, 54 exchanges have closed due to being uncompetitive in the market, which has caused further consolidation of users to top-ranking exchanges. Additionally, China’s crackdown on crypto saw six Chinese-based exchanges close, with the analysts adding:
“As we have seen, volumes have started to become concentrated amongst the top tier exchanges, and this is a trend which is bound to continue into the future. As the industry matures, we expect there to be an oligopoly of exchanges dominating trading volumes as their traction accelerates and smaller players are left behind.”
