The summer move to scrap Bitcoin transaction fees and the collapse of rival exchange FTX have driven even more investors to the Binance platform.
According to Arcane Research, Binance, the world’s largest cryptocurrency exchange, has seen Bitcoin (BTC)’s trading volume share grow to 92% by the end of 2022.
The exchange’s market share was just 45% at the beginning of last year, but users migrated to Binance after trading fees were abolished in June, not to mention the collapse of rival FTX in November.
“No matter how you look at it in terms of trading activity, Binance is the crypto market After lifting trading fees for its BTC spot pairs this summer, Binance completely overtook all market share in the spot market,” Arcane wrote.
Binance has been by far the largest cryptocurrency exchange by trading volume for several years, but these and other numbers suggest a monopoly-like edge. According to a CryptoCompare report, Binance’s overall crypto market share was 66.7% at the end of the year. Coinbase (COIN) came in second with a relatively small figure of 8.2%.
“Retail crypto could enter a dark age that takes forever to exit” should Binance fail. Binance is too big … It is not healthy to have so much of the trading volume concentrated with any one exchange,” said Edward Moya, senior analyst at Oanda.
Binance solvency chatter increased significantly following the collapse of FTX, and the exchange suffered some capital outflows for a short time before things stabilized. Such a high market share could be a problem for the industry if Binance runs into trouble.
Binance is currently under investigation by the US Department of Justice for compliance with anti-money laundering laws and sanctions. The exchange recently lost its auditor, his Mazars Group. Mazars Group has announced it will suspend work with cryptocurrency exchanges that wanted to provide proof of booking.
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