Binance Tops List of Crypto Exchanges in Market Share: Arcane Research

Binance grabbed the largest chunk of the global crypto market in the year 2022. In its analysis, digital assets research firm Arcane said that by the last week of December, Binance had 92 percent of Bitcoin's spot market — the base market where crypto assets are settled and exchanged instantaneously. The company, that had also suffered the impacts of the crypto market slump, had resorted to laying off a substantial part of its work force to keep the business afloat amid the turmoil.

With 61 percent in hand, Binance's market dominance also spread to the Bitcoin derivatives market in terms of volume last year. In derivatives trading, buyers and sellers enter into smart contracts to trade an underlaying assets.

Overall, traders who were processing crypto trade in real time, as well as people who were betting on smart contracts — majority from both the areas — chose to use Binance as their preferred platform.

‘Binance is the crypto market. There are no other evident ‘winners' of 2022 other than Binance when it comes to the crypto market structure and market dominance,” Arcane said in its report.

The exchange, that aims to become the most licenced crypto player in the world, signed some major acquisition deals last year. These include Binance purchasing Indonesia's Tokocrypto exchange and Japan's Sakura exchange.

Towards the last leg of December, Binance did find itself under the spotlight, after it recorded a large number of withdrawals following the collapse of the FTX crypto exchange, that succumbed to a liquidity crunch.

At the time, its CEO Changpeng Zhao had called this ‘normal market behaviour' while attempting to pacify crypto invetsors.

The exchange claimed to have conducted audits of its proof-of-reserves, soon after which, Mazar's, the auditing firm working for Binance, suspiciously halted its work with the exchange.

In a special shout out, Arcane has credited Seychelles-based OKX crypto exchange for making one of the best market recoveries in the crypto sector amid the ongoing crypto winter.

“Since January 2020, OKX has seen its market dominance fall from 30 percent to 8 percent and recover to 25 percent in a truly remarkable recovery. OKX's recovery is the most overlooked and remarkable structural change in BTC derivatives in 2022. 2021 was a devastating year for OKX due to China's crypto bans, leading the exchange's market dominance to plunge,” the report highlighted.

Between 2021 and 2022, the overall crypto sector lost over $2 trillion (roughly Rs. 1,65,74,700 crore). The Russia-Ukraine war, the recession that followed the COVID-19 pandemic, repeated hack attacks, and the collapse of promising crypto projects like LUNA and FTX slashed investor engagement in the sector.

Under market stress, companies like CryptoCom and Binance among a number of others resorted to trimming their respective work forces, firms like BlockFi, Celsius, and Voyager Digital filed for bankruptcy.