Smaller cryptocurrency exchanges like Kraken, ByBit, and BitGate are finally getting their time in the spotlight after the collapse of their more prominent rival FTX last year, according to the findings of a new report from blockchain analytics firm Nansen.
In the report, Nansen said the landscape of centralized exchanges (CEXs) had changed after the FTX crash, with most exchanges affecting their trading volumes as traders became more cautious.
However, there have been some notable exceptions to this, including a number of smaller exchanges that have instead seen an increase in trading volume.
The report notes that exchanges that have seen increased volumes include UAE-based Bybit and US-based cryptocurrency exchange giant Kraken.
The report found that both exchanges increased average monthly trading volume in the six months after the crash to 7.65% from the previous six months and 14.35% from the previous six months.
Meanwhile, BitGate, which is particularly popular with cryptocurrency traders in China and South Korea, is one of the exchanges to lose the least volume since the FTX crash, with a 7.29% drop in volume over the same period.
The strong performance of the three smaller players is notable given the fact that Binance remains – and so far – the largest exchange in the world by volume, despite seeing a decline in its market share following the recent regulatory action.
And although most CEXs were affected by their trading volumes following the FTX bankruptcy, the Nansen report noted that decentralized exchanges (DEXs) did not suffer the same fate.
Instead, DEX trading volume has remained “relatively stable”, the report said.
He added that this trend can be attributed to “less trust in centralized exchanges following the collapse of FTX, as well as greater regulatory uncertainty.”
Transparency becoming more important
In addition to a more level playing field for smaller exchanges, part of the changes seen after FTX has also been a renewed focus on transparency in the industry.
Notably, this has been noted in several so-called proof-of-reserve statements published by major exchanges.
According to Nansen, these types of data do not necessarily guarantee that the exchange is solvent, but should nonetheless be seen as a new “minimum standard” that can be expected from cryptocurrency exchanges.