Although decentralization is a key tenet of the cryptocurrency business, the bulk of liquidity is largely concentrated inside a small number of controlled exchanges (CEXs).

Only eight worldwide companies will control a stunning 91.7% of the liquidity of the whole cryptocurrency market by 2023: Binance, Coinbase, Kraken, OKX, KuCoin, Bybit, Binance.US, and Bitfinex. This information was revealed in a recent article that Bankless Times released on September 15.

It’s interesting to note that the smart data platform Kaiko has also published studies that support this concentration. According to Kaiko, the eight largest centralized exchanges account for 91.7% of all liquidity, with just two of them controlling a sizable 58.5% of it. Examining trade volumes reveals that one CEX controls 64% of the market, which raises concerns about the situation even more.

Crypto liquidity concentration in 2023. Source: Kaiko

Surprisingly, since 2021, there has been a major movement towards centralization in both the liquidity and trading volume of the cryptocurrency market. Only 38% of the overall trading volume was then accounted for by the top centralized exchange (CEX). 65% of trade activity is now divided among the four largest firms rather than being controlled by one in the current scenario, which is characterized by consolidation.