According to the findings of a recent study, citizens of the United States of America, the Republic of South Korea, and the Russian Federation have been the most active users of centralized exchanges this year. This discovery follows the spectacular failure of FTX, one of the largest platforms of its kind, which occurred in the midst of increasing regulations and a decrease in the number of new users.
Although the United States has the most CEX users, Turkey and Japan are the countries that generate the most traffic.
According to the annual report titled “Global Crypto Industry Overview and Trends” that was produced by Huobi Research in 2022-2023, the United States of America, South Korea, and Russia collectively account for 22% of all visits to centralised exchanges (CEX) for cryptocurrencies. This estimate was derived from information gathered from the top 100 CEXs regarding the number of active users, trading depth, trading volume, and reliability.
The United States is clearly in the lead in terms of the absolute number of cryptocurrency users who are responsible for generating CEX traffic, with a share that is greater than 9%. Following South Korea and Russia are Turkey and Japan with respective percentages of 5.6%, 3.8%, and 7.4% of the market share.
The reasons are unique to each country, ranging from Western sanctions against Russians and hyperinflation in Turkey to high unemployment and housing prices in South Korea and Japan. These factors have led young people in these countries to consider investing in cryptocurrencies.
The authors are adamant that “centralised exchanges are essential in the marketplace for cryptocurrencies.” These exchanges are typically easy to use, which is why many people who are new to cryptocurrency begin with them. They also bring up the fact that the majority of the market’s users and liquidity are concentrated in centralised exchanges as another point of discussion.
However, these discoveries have surfaced in the wake of the failure of FTX, one of the largest CEXs, which sought protection under the bankruptcy code on November 11 due to problems with its liquidity. The researchers refer to it as “the incident of the year since entering the current bear market,” and they point out that it is part of a series that also includes the bankruptcy of 3AC and the collapse of Terra.
According to the findings of the study, the total size of the CEX market experienced a more notable decrease in 2022 when compared to the previous year. There was a 24% drop in the total number of unique visitors. According to the report, “existing users are becoming increasingly pessimistic as a result of the persistently dismal market condition as well as the deteriorating assets.” During this time, the number of newly registered users dropped from 194 million in 2021 to 25 million in 2022.
Regulations on Centralized Cryptocurrency Exchanges are Tightening Globally After the FTX Bankruptcy Huobi Research notes that regulations on centralised cryptocurrency exchanges are tightening globally after the FTX bankruptcy, including for on-chain activities, and that regulators may require CEXs to publicise proof of funds or require that they maintain an amount of funds in reserve. Huobi Research also notes that regulations on centralised cryptocurrency exchanges are tightening globally after the FTX bankruptcy.
This year, Russia has been working to expand its legal framework for cryptocurrencies, the EU approved its Markets in Crypto Assets (MiCA) legislation, and South Korea passed eight related regulations. The Executive Order on Ensuring Responsible Development of Digital Assets was signed by Vice President Joe Biden of the United States and was approved by the European Union.
In light of these circumstances, the author focuses on the decentralised finance (defi) market as an example of one of the crypto markets experiencing meteoric growth. Even though there has been a string of unfavourable events in that industry as well, more experienced users of defi continue to have optimism regarding the industry’s potential for recovery and its value over the long term.
The United States also has the largest share in this sector, accounting for almost 32% of the total traffic. In contrast to the CEX market, which is dominated by countries such as the United Kingdom, France, Canada, and Germany, the defi market is dominated by Brazil, which holds the second-place position with just over 5% of the total market share.
Bitcoin News sourced from: News.bitcoin.com
