Source: CoinMarketCap
Main Concept: Gain a deep understanding of the real condition of the cryptocurrency market by conducting a health check on trading platform activities. This analysis considers both centralized and decentralized exchanges, examining the overall health, scale, and level of activity in the current crypto market. The analysis includes factors such as trading volume, market size, and regional/coin coverage.
Trend of daily total trading volume for the top 20 trading platforms (+BTC price): Examining market activity
In Q2 2023, the top 20 trading platforms contributed a total spot trading volume of 16.7 trillion USD, a 36% decrease from the previous quarter, indicating a significant slowdown in market activity. In contrast, in Q1 2023 (26 trillion USD), the doubling of Bitcoin's price drove retaliatory active trading in the overall market at the time.
The current trading volume in the market is similar to the market conditions during the recovery phase after the FTX crash.
Trading volume, market share, trading pairs, and token count of the top 20 cryptocurrency exchanges
Binance maintained its dominant position in the market in the first half of 2023, with a total spot trading volume share of 59.99%, which remained relatively stable compared to the same period last year. The top 5 exchanges accounted for approximately 85% of the total spot market trading volume, showing a more significant concentration effect in liquidity and 24-hour trading volume. Among them, Binance, Coinbase, and Kraken have recently maintained the highest average liquidity scores of >700.
Market trading pairs and token quantities of major trading platforms - July 2023
As for market products, the current market provides a rich variety of trading pairs and tokens, with continuous growth in newly listed projects this year.
Binance continues to dominate liquidity in the large-cap field and follows a high-quality mainstream route for listed tokens. In terms of the number of new listings compared to the existing quantity at the beginning of the year, BitForex and Bitget were among the most active platforms in terms of new listings during the meme coin season from April to June 2023.
Reserve stock of major trading platforms
In the reserves publicly disclosed by each trading platform, Binance ($57 billion), OKX ($10 billion), and Bitfinex ($10 billion) show the highest amount of proof of reserves assets. For most trading platforms, Bitcoin and stablecoins make up the majority of their reserve assets.
In the past quarter, the total amount of proof of reserves assets on major trading platforms remained relatively stable. However, over the past three months, market fear, uncertainty, and doubt (FUD) have caused funds to flow out of Binance, resulting in a reduction of $20 billion in their proof of reserves assets.
One very positive sign in the industry is that despite experiencing significant fund outflows in the second quarter of 2023, Binance still retains a healthy amount of proof of reserves assets, and the composition of these assets consists of highly secure and diversified currencies.
Token Price Performance on Trading Platforms (Compared to BTC and ETH)
In the first half of 2023, most trading platform tokens achieved a net positive return. However, due to the strong rally of Bitcoin (+182% year-to-date), the majority of tokens failed to outperform Bitcoin.
DEX Trading Volume and Market Share
Trading volume for 15 major decentralized exchanges (DEX) reached its peak in March this year and remained stable in the second quarter. In the second quarter, the total trading volume of DEX reached $189 billion, a 24% decrease from the first quarter's $249 billion.
Uniswap, Binance, and Coinbase: Trading volume and price performance
Uniswap maintains a dominant position in the DEX market, occupying 57.5% of the market share. Its monthly trading volume is on par with Coinbase's spot trading volume. In the first half of the year, the top three DEX: Uniswap, Pancake, and Curve, accounted for approximately 82% of the total DEX market volume.
Although centralized exchanges (CEX) are still a more popular choice than DEX, the ratio between DEX and CEX has increased to approximately 1:8.
This can be attributed to various factors, including recent innovations in DEX products, market concerns about CEX driven by regulatory developments, lower gas fees, and a higher proportion of native crypto participants in the current market conditions.
DEX Trading Volume by Chain
In the first half of 2023, approximately 80% of decentralized exchange (DEX) trading volume occurred on Ethereum and its Layer 2 chains. However, in the second quarter, BNB quickly caught up and gained a larger share of the DEX trading market.
