Q2 2023 Saw A Slowdown in Market Activities for Top 20 Exchange, CoinMarketCap reveals
Binance maintains dominant position in H1 2023 despite market slowdown.
In Q2 2023, the top 20 crypto exchanges saw a total spot trade volume of $1.67 trillion, which is a significant decrease of 36% from the previous quarter according to a CoinMarketCap research.
This drop in volume suggests a slowdown in market activity, following the active trading in Q1 ($2.6 trillion) that was largely driven by the doubling of Bitcoin's price. The current trade volume is similar to what was observed during the recovery period after the FTX crash.
Binance has maintained its leading position in the market throughout H1 2023, with a spot trading volume share of 59.99%, which is relatively stable compared to the same period last year. The top 5 exchanges accounted for approximately 85% of the total spot market volume, resulting in a positive skew towards the leaders in terms of liquidity and 24-hour trade volume. Binance, Coinbase, and Kraken had the highest Average Liquidity scores, exceeding 700.
The market currently offers a healthy number of trading pairs and available coins, with a continuous increase in new listings. Binance continues to dominate liquidity in the large-cap space, with its new listings focusing on high-quality mainstream coins. BitForex and Bitget were among the most active exchanges in adding new coins during the memecoin season from April to June 2023, when comparing the proportion of new coins added to their total listings.
Binance ($57 billion), OKX ($10 billion), and Bitfinex ($10 billion) have the highest amount of Proof of Reserve Assets among the disclosed exchanges. Bitcoin and stablecoins make up the majority of reserve assets for most exchanges. The total amount of Proof of Reserve assets has remained relatively stable over the past quarter, but recent market FUD has led to capital outflows from Binance, reducing its proof-of-reserve assets by $20 billion. Despite these substantial outflows from Binance in Q2, it still maintains a healthy amount of Proof of Reserve assets, consisting of a safe and diversified composition of coins. This is an encouraging sign for the industry.
In H1 2023, most exchange tokens achieved net positive returns, but most were unable to outperform Bitcoin (+182% YTD).
The top 15 DEXs saw their peak trading volume in March this year, and it remained consistent throughout Q2. In Q2, the total DEX volume reached $189 billion, which is a decrease of 24% from Q1's total of $249 billion. Uniswap dominates the DEX market with a market share of 57.5%. Its monthly volume is on par with Coinbase's spot volume. The top 3 DEXs - Uniswap, Pancake, and Curve - accounted for approximately 82% of the total market in H1 2023.
While CEX remains the preferred choice over DEX solutions, the DEX to CEX ratio has increased to around 1:8. This can be attributed to several factors such as advancements in DEX products, concerns about CEX due to regulatory developments, lower gas fees creating a more favorable environment, and an increase in crypto-native participants given current market conditions.
In H1 2023, around 80% of DEX trade volume occurred on Ethereum and its Layer2 chains. However, BNB has been rapidly gaining ground in Q2 and now holds a larger share of DEX trading market.