Crypto exchanges: winners and losers of May sell-off

Market downturns are good not only for the bears: crypto exchanges too profit from the sell-offs, pocketing an increasing number of trading fees.

A recent study by The Block reported crypto exchanges trading volume increasing by almost 20% in May.

Unsurprisingly, the leading exchange is still Binance with its 64.1% market share, but the runner-up is not Coinbase anymore.

For the first time ever the highest monthly trade volume was processed by FTX, one of the youngest exchanges led by crypto industry’s darling Sam Bankman-Fried.

Although still smaller than Coinbase by transaction count, FTX registered a bigger trade volume thanks to its higher average trade pair size ($2k for the BTC/USD on FTX vs $1k on Coinbase).

Thus, FTX now enjoys a 10.8% market share, with Coinbase settling at 9.6%.

This news might have added to Coinbase’s fears and contributed to its recent risk-off strategy: after posting a $430M loss in Q1 2022, the company has been on hiring freeze, which extended yesterday to backfill roles and already accepted job offers, sending indignation waves across the space.

Coinbase is not alone in its cost-cutting measures. Gemini and a number of LatAm exchanges have also recently announced a series of lay-offs, prompting “crypto winter” fears.

However, exchanges are businesses first, and their business decisions do not necessarily reflect the larger market situation. So while Coinbase, Gemini and some others tighten the belt, FTX is launching an outlet in Japan, and Binance is sponsoring The Weeknd’s World Tour conceived to “integrate Web3 technology to enhance fan experience”.

Bear market is just another beginning ?