The cryptocurrency market is becoming more centralized

The cryptocurrency market is becoming more centralized

Miner Centralization: BIG RISK For Bitcoin?? 😨


The cryptocurrency market is becoming more centralized

  • In the cryptocurrency market, only three assets control 90% of the total trading volume.

  • Centralization becomes more and more rigid, including crypto exchanges.

  • In the near future, decentralized exchanges are unlikely to be able to change the current situation on the market..

International consortium of news organizations, developing standards for transparency.

The dominance of three digital assets is growing at a steady pace, making the cryptocurrency market less and less decentralized.

The cryptocurrency market is becoming more centralized

Real trading volumes are focused on just three assets. This conclusion was reached in the analytical service Messari.

Almost 90% of all activity is focused on Bitcoin, Ether and USDT stablecoin, according to the published chart..

It is noteworthy that a significant part of trading falls on stablecoins. Stablecoins – literally translated from English “stable” coins – continue to gain popularity in the digital asset market. With … More, not bitcoin, which took the lion’s share in 2017.

If in 2019 the top 3 assets in terms of volume accounted for only 75% of total trading, then in 2020 all 90%.


At the same time, XRP, BCH and XTZ have significantly lost a fairly large market share in just the last couple of years..

Complex centralization

In addition to the growth of centralization among cryptocurrencies, the influence of platforms providing cryptoasset trading services is also growing..

So, recently Bitcoin analyst Willie Wu said that cryptocurrency trading platforms will replace miners as central sellers of bitcoin because they will be able to receive much more cryptocurrencies from commission costs than miners from mined cryptocurrencies..

The centralized cryptocurrency exchange Coinbase went further and announced that it was the decentralized cryptoexchanges (DEX) that would revolutionize the trading market..

The cryptocurrency market is becoming more centralized

The reasons for this superiority of DEX are noted:

  1. Security of users’ funds as assets are never transferred to any third party
  2. Independence;
  3. Ease of use and anonymity: no need for KYC (know your customer).

There will be no decentralization

Coinbase (which by the way is a centralized exchange) believes that DEX will be able to guarantee the best order execution as global liquidity will accumulate on several major platforms, ensuring the speed of transactions..

The cryptocurrency market is becoming more centralized

However, the current DEX implementations leave a lot to be desired. The head of the cryptocurrency exchanger, Alexander Momot, said earlier in an interview with BeInCrypto that many DEXs are no longer anonymous and still require the KYC procedure.

“And with the introduction of the fifth EU anti-money laundering directive (AML5), most sites will try to introduce this procedure, and, indeed, only a few anonymous exchanges will remain,” Momot added..

What do you think? How badly such centralization will affect the market? Share your thoughts in the comments.


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