A report from Arcane Research of January 3 crowns Binance, the world’s largest crypto exchange, as the big winner of the past year. After the demise of FTX, the Changpeng Zhao (CZ) exchange has been able to increase its market share and is now the largest crypto exchange by far.
Crypto market dominance
As of December 28, 2022, Binance had captured 92% of the bitcoin (BTC) spot market and 61% of the bitcoin derivatives market by volume. With this it dominates the crypto industry and Arcane therefore equates the crypto exchange with the crypto market:
There are no clear ‘winners’ of 2022 than Binance when it comes to crypto market structure and market dominance. However you look at it in terms of trading activity, Binance is the crypto market.”
Binance’s BTC spot market dominance was 45% at the start of 2022, meaning it has more than doubled in 12 months. The share of the BTC derivatives market has increased by almost a third over the same period. In the BTC spot market, bitcoin is traded directly between two people, a seller and a buyer. With derivatives trading, you do not need to own the underlying asset. The value of the contract is designed to track the price of bitcoin.
Arcane’s report suggests that the rise in BTC dominance in Binance’s spot market predated the demise of FTX. Namely, it started rising after fees for certain trading pairs were lifted on July 7, 2022
Grow Binance
The crypto exchange also made some notable acquisitions to increase global coverage in 2022, such as Japanese trading platform Sakura Exchange BitCoin and Indonesian exchange Tokocrypto.
Also, Binance had been one of the few exchanges to increase the number of employees it employs over the course of the past year. For example, you could recently read in the crypto news that crypto exchanges Huobi, Bybit, Kraken and Crypto.com were all forced to cut their workforce as a direct result of the persistent bear market.