According to Arcane Research, the cryptocurrency exchange Binance has emerged as the obvious “winner” of 2022. This comes after a year beset by crises like the collapse of FTX and Celsius. The data reveals that Binance has emerged as the clear “winner.” Binance’s market domination has increased significantly throughout 2022 due to the aftermath of FTX, the implementation of zero-charge BTC trading, and several big foreign acquisitions.
The research by Arcane stipulates that Binance significantly increased its market domination during 2022. As of the 28th of December in the previous year, it had seized control of 92% of the Bitcoin spot market and 61% of the BTC futures market by volume:
“Regarding the structure and domination of the cryptocurrency industry, there are no other obvious “winners” of 2022 outside Binance. Whatever perspective you take on trade activity, Binance is the cryptocurrency market.” Arcane wrote.
Binance dominating the Bitcoin spot market
In 2022, Binance’s share of the Bitcoin futures market grew by about a third, while its portion of the Bitcoin spot market more than doubled. The daily “spot trading volume” of Bitcoin is an indication of how much Bitcoin was traded on spot exchanges that day.
According to the analysis, Binance’s dominance in the BTC spot market started to rise on July 7, 2022, when it stopped charging commissions on several trading pairings, far before the crash of the second biggest exchange by volume, FTX. In 2022, the exchange expanded its worldwide reach through several strategic acquisitions, including the Japanese trading platform Sakura Exchange BitCoin and the Indonesian digital currency brokerage business Tokocrypto.
While competitors like Kraken and Coinbase have had to lay off employees due to the ongoing crypto winter, Binance has been hiring more people over the last year. According to a report published by Arcane on December 30th, the exchange Binance will reintroduce trading fees in 2023, which would “normalize the market domination.”
The removal of fees helps exchanges to attract consumers, but they “must be watchful to stay profitable” and “cannot utilize this tactic for lengthy periods without damaging their bottom line,” according to research published by digital asset monitoring company CryptoCompare on January 3.
Following the implosion of the FTX empire, there has been a heightened emphasis on crypto legislation worldwide, which might lead to more scrutiny of Binance in 2023, especially about its native coin BNB.
While Bitcoin enthusiast Nic Carter has noted that Binance’s proof-of-reserves (PoR) is inadequate since “it only covers Bitcoin,” which only accounts for 16.5% of their customers’ assets, even though Binance CEO Changpeng Zhao has been vociferous in his support of exchanges implementing PoR.