Benzinga – by Bibhu Pattnaik, Benzinga Staff Writer.
In the dynamic world of cryptocurrency buying and selling, a handful of exchanges have emerged as dominant forces, holding a considerable share of market liquidity.
What Happened: Recent knowledge sheds mild on this focus, revealing {that a} mere eight platforms management the lion’s share of the market depth and buying and selling quantity.
According to a recent evaluation by knowledge analytics agency Kaiko, a good portion of the cryptocurrency market’s depth — almost 92% — and buying and selling quantity — particularly 90% — are concentrated in simply eight exchanges. Binance alone accounted for over 30% of the worldwide market depth and a large 60% of the commerce volumes globally this 12 months. Other notable exchanges on the record embody Coinbase, OKX, and Huobi.
“Highly concentrated crypto markets are both a good and bad thing. There is undoubtedly a shortage of liquidity, which when spread thin across many exchanges and trading pairs can exacerbate volatility and disrupt the price discovery process,” Kaiko analysts Dessislava Aubert and Clara Medalie mentioned in a observe, in line with Bloomberg.
Also Read: Expert Believes One Catalyst Could Trigger Bitcoin To Explode By More Than 450%
The analysts additional famous the potential business pitfalls, akin to vital disruptions, citing the collapse of FTX.
The crypto market witnessed a tumultuous interval final 12 months with a considerable dip in costs, main to an enormous exit of buyers who had incurred losses amounting to billions of {dollars}. Since then, many crypto analysts have reportedly been scrutinizing liquidity measures and buying and selling volumes.
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August recorded the bottom crypto buying and selling volumes of the 12 months. The complete quantity encompassing spot and derivatives buying and selling plummeted by 11.5% to $2.09 trillion, a determine solely surpassed by the low recorded in October 2020, knowledge compiled by CCData revealed.
Despite a interval of relative stability in the summertime, the crypto market is displaying indicators of elevated volatility, with Bitcoin experiencing bigger fluctuations not too long ago.
Now Read: Ex-Morgan Stanley Tech Director Believes Crypto Represents Long-Term Growth Opportunity
This content material was partially produced with the assistance of AI instruments and was reviewed and printed by Benzinga editors.
Photo: Shutterstock
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