March 30, 2023

Amid uncertainty in the macroeconomic ecosystem, leading exchanges like Binance managed to steal the show in terms of volume and consumer interest.

August saw volatility return to cryptocurrency markets as the top crypto asset by market cap — Bitcoin, and Ethereum — failed to break above key resistance levels. BTC and ETH prices closed last month at $20,050 and $1,554, down 14.0% and 7.47% respectively.

Notably, the impact of market momentum, and volatility was visible in spot trading volumes on centralized exchanges which jumped 36.8% to $1.91 trillion in August.

A more volatile and unpredictable environment has made investors and traders more cautious which can be seen in their investment patterns and psychology throughout the last month. A CryptoCompare report highlighted that Binance, one of the world’s leading cryptocurrency exchanges, captured 55.1% of the spot volume market share in August as top-tier exchanges continued to dominate their markets.

Binance market share dominates

The data highlights that last month, total spot trading volume rose 36.8% to $1.91 trillion as investors continued to take advantage of the volatility. Top-tier exchange spot volume rose 41.6% to $1.80 trillion while lower-tier spot volume fell 12.3% to $108 billion.

In fact, the market share was largely captured by the top exchanges which represented 94.3% of the total spot volume. This was the highest market share captured by a top-tier exchange since November 2017.

Daily Peak Level Spot Exchange Volume | Source: CryptoCompare

Binance remains the largest top-tier spot exchange with trading volume of $438 billion, followed by Coinbase trading at $58.3 billion, and AAX trading at $54.9 billion. Binance’s continued dominance has represented heightened retail crowd activity amid prolonged volatility.

Historical Monthly Top-Level Spot Volume – 3 Months | Source: CryptoCompare

Uncertainty Still Plaguing the BTC Market?

In August, as BTC and ETH failed to break above their respective key resistance levels of $24,500 and $2,000, investors continued to rely on top exchanges amid uncertain macroeconomic conditions. This volatility was reflected in trading volume as spot trading concentrated
The exchange jumped 36.8% to $1.91 trillion.

Bitcoin spot trading in USDT rose 15.4% in August to 10.1 million BTC as investors prioritize safety amid the current uncertain macroeconomic conditions. BinanceUSD (BUSD) and BTC spot trading in USD rose 0.44% and 0.33% to 2.14 million BTC and 1.31 million BTC, respectively.

BTC Netflows | Source: IntoTheBlock

Looking at the net flow of BTC on collective exchanges it can also be said that uncertainty still plagues BTC investors as the net flow was largely positive throughout the month of August. Net inflow is positive when more funds enter than leave the exchange and vice versa.

Derivative volumes are lower annually

As spot trading volume rose 36.8% to $1.91 trillion, derivatives trading volume across all centralized crypto exchanges rose 1.91% to $3.16 trillion, registering the first increase in three months.

Derivatives market share fell 9.59% to 62.4%, an annual low for the metric, on the back of an increase in spot trading volume. Historically, the derivatives market has dominated crypto trading volume.

Declining derivatives market share reflects uncertain macroeconomic conditions with rising inflation rates and risks of recession. The price action, after the Fed’s reiteration of its stance to control inflation, suggested that investors had a strong sell-off from spot holdings.


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