December 2023 marked a significant turnaround for centralized crypto exchanges, following a challenging period that saw the lowest spot market activity in over four years and declining investor trust due to the FTX collapse in November 2022.

Revival of Centralized Exchanges

In the final quarter of 2023, centralized exchanges experienced a resurgence, with spot volumes reaching $2.99 trillion, a 125% increase from the previous quarter. December alone witnessed a 34.0% rise in overall trading activity in the spot market, hitting $1.34 trillion – the highest monthly spot trading volumes of 2023 and the peak since June 2022.

Top-tier exchanges like Binance, OKX, and Bybit led the charge in spot volume, collectively accounting for 64.3% of the total volume. This was a slight uptick from 62.1% in November.

Derivatives Market Trends

The derivatives market also saw growth, with volumes increasing by 26.3% to $3.34 trillion in December, the highest since December 2021. Despite this, the derivatives market’s share in the overall crypto market dipped to 71.4%, the lowest since February 2023, as spot markets gained prominence.

Binance’s Resurgence

2023 posed significant challenges for Binance, including legal issues, operational withdrawals, and key executive resignations. However, the platform rebounded strongly in December, leading the derivatives exchange by trading $1.58 trillion, a 25% increase from November. OKX and Bybit followed suit with significant trading volumes. and Coinbase emerged as the top-performing derivatives exchanges, with increases of 94.9% and 68.6%, respectively. Binance also saw its market share grow for the first time in ten months, reaching 32.5%. Conversely, Upbit and Huobi experienced declines in their market shares.

Overall, the end of 2023 brought renewed optimism for centralized crypto exchanges, signaling a potential recovery and renewed investor interest in the sector.

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