The highest centralized cryptocurrency exchanges have reached all-time highs for market share this 12 months as buying and selling quantity in crypto consolidates onto the platforms of only some trusted corporations.

So named “top-tier” crypto exchanges have elevated their market share from 89% in August 2021 to 96% in February 2022 in line with data collected by UK analytics firm CryptoCompare printed on Monday, April 11.

The agency analyzed over 150 lively centralized exchanges, ranking them on safety, variety of property obtainable, regulatory compliance, KYC checks, and extra, grading them from a high rating of AA to a low of F with “high tier” receiving a grade B or above.

A complete of 78 exchanges obtained a “high tier” grade, with Coinbase, Gemini, Bitstamp, and Binance the one 4 to obtain the very best AA grading.

The report revealed that top-tier exchanges traded a complete of $1.5 trillion in February 2022 in comparison with $62 billion within the “lower-tier” exchanges. This can be a metric that CryptoCompare claims present “each retail {and professional} merchants are transferring to decrease threat exchanges.”

Consolidation of exchanges has occurred by way of each change closures and acquisitions from different, bigger exchanges. Prime crypto exchanges eyeing abroad growth generally purchase already licensed, smaller exchanges working within the nation of curiosity, as was the case with FTX’s acquisition of the Japanese Liquid Group change on February 2nd, 2022.

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The agency reported that since June 2019, 54 exchanges have closed as a consequence of being uncompetitive available in the market which has brought on additional consolidation of customers to top-ranking exchanges. Moreover, China’s crackdown on crypto noticed 6 Chinese language-based exchanges shut with the analysts including:

“As now we have seen, volumes have began to change into concentrated amongst the highest tier exchanges, and this can be a development which is certain to proceed into the longer term. Because the trade matures, we count on there to be an oligopoly of exchanges dominating buying and selling volumes as their traction accelerates and smaller gamers are left behind.”

The report surfaced some challenges which lay forward for the cryptocurrency change trade, highlighting the political strain placed on exchanges to implement Russian sanctions as an space that would see extra motion.

“Whereas many exchanges have resisted this strain,” the analysts wrote, “this political issue is a crucial threat to think about for the way forward for exchanges.”

The motion of crypto customers that want self-custody of property was additionally a problem flagged within the report. “The mantra of ‘not your keys, not your cash’ is rising stronger amid the political strain obtained by exchanges,” the report states, earlier than including it’s a “motion that would hinder the enterprise mannequin of exchanges.”