Amidst a challenging backdrop where the crypto spot market witnessed its lowest activity levels in over four years, the downturn created a daunting scenario for centralized exchanges and market makers, exacerbated by the collapse of Sam Bankman-Fried’s FTX in November 2022.
This incident had a profound impact on investor trust in centralized entities, casting a shadow on the overall market depth. December 2023, however, brought about a notable shift in sentiment. In Q4 2023, centralized exchanges registered a spot volume of $2.99 trillion, marking a 125% rise from the levels observed in the preceding quarter.
Centralized Exchanges See Turnaround in Spot Volumes
According to CCData’s latest Exchange Review report, the overall trading activity in the spot market witnessed a substantial increase of 34.0%, reaching $1.34 trillion in December. This marked the peak monthly spot trading volumes for the entire year of 2023. Notably, it marked the third consecutive monthly rise in spot trading volumes and the highest levels observed since June 2022.
Top-tier spot volumes, in particular, experienced a notable surge, rising by 35.5% to $950 billion. Lower-tier spot volumes also saw a significant increase of 30.5%, reaching $398 billion.
Binance, OKX, and Bybit emerged as the top exchanges in terms of spot volume in November, outperforming other AA-A-graded exchanges. Within the Top-Tier exchanges, they collectively represented approximately 64.3% of the total volume, showing a slight increase from 62.1% in November.
Derivatives volumes also experienced a 26.3% increase, reaching $3.34 trillion in December. This represented the third consecutive monthly rise in derivatives trading volume and represents the highest monthly volume since December 2021.
However, the derivatives market now constitutes 71.4% of the entire crypto market, indicating a slight decline from 72.6% in November. Thereby, this records the lowest share of the derivatives market since February 2023, as spot markets continued to surpass derivatives trading activity in December.
Binance Resurgence
The year 2023 proved to be a challenging period for Binance, marked by legal issues, withdrawals from specific countries, and the resignation of numerous executives, including CZ stepping down as CEO.
Despite these setbacks, Binance experienced a positive turnaround. CCData reported that in December, Binance emerged as the leading derivatives exchange by monthly volume, trading $1.58 trillion, reflecting a 25% increase from November. Following Binance were OKX with $857 billion in trading volume, up 30%, and Bybit with $443 billion, up 18.1%.
Meanwhile, Crypto.com and Coinbase were the best-performing derivatives exchanges, recording impressive increases of 94.9% and 68.6%.
Additionally, Binance witnessed a notable rise in its market share for the first time in ten months, increasing by 0.70% to reach 32.5%. However, Upbit and Huobi experienced significant declines in market share in December, dropping by 2.05% and 0.92% to 7.14% and 3.56%, respectively.
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