Binance Dominated 92% of Bitcoin Spot Trading Volume in 2022: Arcane Research Report
Binance Sees Surge in Investors Following Decision to Eliminate Bitcoin Trading Fees and FTX’s Demise
Binance, A Force To Be Reckoned With
According to Arcane Research, Binance, the largest cryptocurrency exchange in the world, saw its market share of bitcoin (BTC) trading volume increase to 92% by the end of 2022.
Binance’s market share of bitcoin (BTC) trading volume was only 45% at the beginning of last year, but the exchange’s decision to eliminate trading fees in June and the collapse of rival FTX in November caused an influx of users to the platform, bringing its market share to 92% by the end of 2022, according to Arcane Research.
Arcane commented that Binance has become the dominant player in the cryptocurrency market, with a market share of 92% in bitcoin (BTC) trading volume by the end of 2022.
The research firm stated that “no matter how you look at it in terms of trading activity, Binance is the crypto market.” Arcane noted that Binance’s decision to eliminate trading fees for BTC spot pairs earlier in the year allowed the exchange to “completely overtake all market share in the spot market.”
Data suggests that Binance, the largest cryptocurrency exchange in terms of trading volume for several years, has a “monopoly-like dominance” in the market as per CoinDesk.
According to a report from CryptoCompare, Binance had a 66.7% market share of the cryptocurrency market at the end of the year, while Coinbase came in second with a small 8.2%.
Edward Moya, a senior analyst at Oanda, warned that the retail cryptocurrency market could potentially enter a long period of decline if Binance were to fail.
Moya added that Binance is “too big” and that it is not healthy to have such a large concentration of trading volume with any one exchange.
But Is All Really Going Well For The Firm?
There have been increasing concerns about the financial stability of Binance following the collapse of FTX, and the exchange did see some outflows for a brief time.
However, the situation has since stabilized. If Binance were to experience any problems, whether regulatory or related to user trust, its extremely high market share could pose difficulties for the industry.
The U.S. Department of Justice is currently investigating Binance for compliance with anti-money laundering regulations and sanctions as well as Coinbase which is now required to pay a $100 million settlement fine.
In addition, the exchange recently lost its auditor, Mazars Group, which announced a temporary halt to its work with crypto exchanges seeking to provide proof-of-reserves.
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