In a much-anticipated release, CoinMarketCap, the renowned cryptocurrency information platform, exposed its “Unveilling the Crypto Market” exchange report for the initial half of 2023. This comprehensive analysis delves into two prominent categories: centralized exchanges (CEX) and decentralized exchanges (DEX), presenting valuable insights into the market dynamics. This report offers a captivating snapshot of the current landscape by scrutinizing the trading volume disparity between CEX and DEX and evaluating the performance of exchange tokens.
CoinMarketCap Centralized Exchange (CEX) Data Revealed
First, the report looks at the total spot trading volume of the top 20 exchanges in the past four quarters. It is recognised that the trading volume in the first quarter of this year has increased by about 26% compared with the previous quarter. CoinMarketCap believes that there will be such apparent growth. Bitcoin rose 72.1% in the quarter, driven by the asset’s price.
However, trading volumes slowed significantly in the second quarter, down about 36% quarter-on-quarter. CoinMarketCap says current trading volumes are very similar to market conditions observed during the recovery phase of the FTX crash.
Looking at the various exchanges separately, Binance still exhibits dominance on the spot market share and reached nearly 60% in February this year – which later dropped to about 47%.
Among these exchanges, Gate.io has the most trading pairs (Current Number of Markets), followed by Binance. However, regarding the number of cryptocurrencies (Current Number of Coins), Binance shares less spotlight. CoinMarketCap said that this is mainly due to Binance selecting high-quality mainstream coins.
As for security, Binance ($57 billion), OKX ($10 billion) and Bitfinex ($10 billion) have the highest proof of asset reserves among the disclosed exchanges, with most exchanges holding more than 1,000 bitcoins Coins and stablecoins.
As the figure below highlights, Binance’s reserve assets declined significantly in June. This phenomenon is related to the market triggered by the SEC’s prosecution. The outflow of funds led to a decrease of about 20 billion U.S. dollars in Binance’s reserves.
Although the trading volume of exchanges this year is not particularly outstanding, and the market conditions are relatively deserted, most exchange tokens are flat or rising this year, and only Huobi Token has experienced a significant decline.
CoinMarketCap Decentralized Exchange (DEX) Data Revealed
Following the examination of CEXs, the report brings down the data of DEXs. The trading volume of the top 15 exchanges peaked in March this year. Although the trading volume dropped in the second quarter, the factor maintains stability. Transaction volume in the second quarter was $189 billion, down 24% quarter-over-quarter.
Among these exchanges, Uniswap has the highest proportion of trading volume this year, 57.5%, far exceeding other competitors. It is then followed by Pancakeswap and Curve, with 12.7% and 11.5% respectively.
If Uniswap is compared with centralized exchanges, its trading volume is equal to Coinbase’s but still far from Binance’s.
Since the beginning of this year, the ratio of DEX trading volume to CEX spot trading volume has gradually increased and is currently about 1:8. CoinMarketCap believes this can be attributed to several factors, including:
- The latest developments in DEX products.
- Regulatory intervention raises concerns about CEXs.
- More favourable environment and lower gas costs.
- The current market has a higher proportion of cryptocurrency-native participants.
Finally, Ethereum usage still dominates all blockchains, with about 80% of DEX transaction volume happening on Ethereum and its Layer 2. However, in the second quarter of this year, the DEX transaction volume on the BNB chain also increased, accounting for about 15%
