China Exit Still Hurts Huobi’s Market Share, CoinGecko Q1 Report Shows
Huobi Global’s gradual exit from China over the last six months is still having an adverse effect on its operation, CoinGecko’s latest state of cryptocurrency report for Q1 2022 shows. The top exchange’s market share shrank by nearly 40% since the end of Q4 2021 and ended the first quarter of 2022 with only a 4.3% share by volume among the top 10 centralized exchanges (CEXs), the cryptocurrency aggregator notes.
Though crypto markets as a whole took a hit in Q1 2022 with top 30 assets’ cap bleeding since hitting all-time highs in Nov 2021 and shed over $1 trillion as of Jan 23, Huobi Global’s 4.3% share at the end of the quarter is a sharp decline from its 8.7% share in Oct 2021. The top 10 CEXs had a total of $3.31 trillion in spot trading volume in Q1 2022 compared to $5.6 trillion in Q4 2021, the CoinGecko Quarterly Report Q1 2022 states.
Huobi Global used to be China’s largest crypto exchange. Following China’s recent declaration that crypto transactions have become illegal in the country, the exchange became one of the first CEXs with links to China to act on eliminating existing Chinese users.
It ceased account registration for new users in Mainland China effective September 24 as it gradually retired existing Mainland China user accounts by Dec 31 when it hoped to have completed their liquidation.
It later opted to charge management fees – 0.2% of the snapshot capital monthly or charged accordingly to a single account that is less than 1 USDT – to users who still do not withdraw cryptocurrency after the due date of February 15, 2022.
Though Huobi has never disclosed the actual number of its Chinese users, it has been suggested that the exchange has about 15 million users – as of 2020 – hence several millions were considered to have been removed as Chinese users. The impact on its business has seen the top exchange contemplate a plan to re-enter the U.S. market after more than two years of absence.
While spot trading volumes have shrunk since May 2021 when the Chinese government took a new turn to ban all crypto mining activities within its borders, CoinGecko notes that they remained relatively steady throughout Q1 2022. It puts total spot trading volume at an average $1.26 trillion monthly volume in Q1 2022 as the total trading volume of top 10 centralized and decentralized exchanges (CEXs and DEXs) declined from Q4 2021 to Q1 2022 by -37.8% – or $6.08 trillion to $3.79 trillion when compared to Q4 2021.
Top 10 CEXs recorded a total of $3.31 trillion in spot trading volume in Q1 2022 meaning a -40.5% decline but Binance’s market share in the quarter rebounded slightly to 46.5% following its secured license to operate in the Middle East. The volume for top 10 DEXs fared better than CEXs, dropping by 8.5% for the quarter. The top DEXs recorded a total of $472.8 billion in spot trading volume in Q1 2022 starting off with $190 billion to end the quarter with $144 billion. The varying performances of both forms of exchanges saw the DEX:CEX ratio increase slightly from 11.8% in December 2021 to 12.8% towards the end of March 2022.
Other highlights of the report include that the trading volume for Bitcoin perpetuals across the top 10 derivatives exchanges decreased by $200 billion in Q1 2022 while the overall trading volume remained at $1.2 trillion like in Q4 2021. Also, Binance lost its dominance as its market share dropped by 7% since December 2021.
“With continued geopolitical and macroeconomic uncertainties, expect more choppy waters ahead,” the CoinGecko founders note. “At the same time, it’s never been a better time to ignore the noise and BUIDL before the next bull run hits.”