The top cryptocurrency exchanges have increased their market share to 96 percent showing an Oligopoly by crypto exchanges. The shift is being driven by both retail and professional traders switching to lower-risk exchanges.
According to a study, the largest crypto exchanges globally have acquired an all-time high market share, indicating an oligopolistic crypto market. The study also shows that the crypto exchange business is integrating.
Facts behind oligopoly of crypto exchanges from the study
Following are the global key points of the study:
- Major exchanges increased their market share from 89 percent in August 2021 to 96 percent in February this year.
- These top-tier platforms have maintained a steady trading volume of roughly 88 percent during the previous six months.
- This shift is being driven by both retail and professional traders switching to lower-risk exchanges. Particularly since lower-tier exchanges may not have licensed organisations or provide crypto insurance.
- Global exchanges including Coinbase, Bitstamp, Gemini, and Binance have been rated as the safest alternatives with AA ratings.
- Smaller players have fought to stay alive due to stronger benchmark criteria, increased regulatory monitoring, and greater security standards.
- The crypto exchanges have adapted their processes in response to shifting regulatory environments. For example, anti-money laundering, stringent KYC and counter-terrorism funding regulations now apply to regulated exchanges (AML-CTF).
India related findings
- Trading volumes in India have decreased since the beginning of April as a result of the government’s new crypto taxation policy, according to recent findings.
- The National Payments Corporation of India (NPCI) has declared that no crypto platform will be allowed to utilise its fast payment system.
Since August 2021, top crypto exchanges have had a significant presence in the merger and acquisitions (M&A) sector. Big names like Binance, Gemini, and FTX have purchased competitors or invested in other areas of the crypto industry through their venture arms.
