How Binance Dominates the Bitcoin and Crypto Market

Since the collapse of FTX, once the second largest exchange by trading volume, the crypto landscape has changed fundamentally and it should come as no surprise to many that Binance has emerged as a big winner. Vetle Lunde, Senior Analyst at Arcane Research is Published detailed analysis of this.

“No matter how you look at it in terms of trading activity, Binance dominates the crypto market,” the analyst says, further stating that the Changpeng Zhao-led exchange is the clear winner in 2022.

As an Arcane Research analyst notes, Binance occupies 92% of Bitcoin’s spot volume. Incredibly, the exchange only accounted for 42% of BTC spot volume in January 2022. After the exchange removed trading fees on its BTC spot pairs this summer, growth exploded.

“We have to go all the way back to the Mt. Gox boom to find a period where one exchange dominated in a similar way,” Lunde asserts.

Binance / Bitcoin spot volume
Binance Bitcoin Spot Volume Ratio in 2022

Binance’s dominance has increased worldwide

But not only the spot volume but also the perp volume puts Binance in a different league than all other crypto exchanges. According to Arcane Research, the exchange is responsible for 66% of the global standing volume of all cryptocurrency swaps. OKX with 16% and Bybit with 13% are far behind in the following rankings.

CZ’s exchange also represented 55% of perp trading volume until November, but after the collapse of FTX, the exchange took more or less all of the market share of perp trading, leading to a rapid and overwhelming growth in market dominance, Lunde says.

global permanent swap volume
global permanent swap volume

At 49%, Binance is no less dominant in global perp open interest, followed by Bybit at 23% and OKX at 20%. Similar to volumes, exchanges’ dominance gained the largest market share after the collapse of FTX.

Binance also holds a whopping 61% of Bitcoin perp and futures volume. This makes the dominance for BTC almost as great as for all crypto perpetrators. It is interesting that the market share of the stock exchange grew steadily during the year. However, it is striking that “more or less all the market share” went public in November after the collapse of FTX.

Bitcoin futures and perps volume / Binance dominance
Bitcoin futures and perps volume dominance

In contrast, Binance’s dominance is less pronounced when it comes to open interest in BTC perps and futures, where the exchange is responsible for 30%, followed by OKX (24%), Bybit (19%) and CME (16%). “Nevertheless, Binance was the market leader throughout the year maintaining a 25-35% OI market share in BTC derivatives,” Lunde explained.

In addition to these statistics, Binance managed to collect other achievements in 2022, according to a senior analyst at Arcane Research. BUSD gained market share in the stablecoin industry (from 11% to 14%), and BNB significantly outperformed BTC and ETH.

Moreover, Binance continued to grow its employee base while the entire industry was forced to lay off workers. As Lunde explained, the stock exchange managed to double its workforce while others laid off half their workforce or went bankrupt.

Meanwhile, BNB price has weakened over the past few weeks after numerous rumors about Binance worried investors. At press time, the price had stabilized at $243.90.

Binance BNB USD 30.12.2022
BNB price, 4-hour chart

Featured image from Binance.com, charts from Arcane Research and TradingView.com

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