A look at trading volumes on major cryptocurrency exchanges has revealed a geographic shift in crypto trading activity.
According to a study by crypto analytics firm Coin Metrics, the most notable such shift in activity has been the decline of volume on China-focused exchanges over the last year. This has been attributed to the country’s fresh crackdown on mining, in addition to the renewed ban on most other crypto related activities, Coin Metrics wrote, pointing to Huobi as an example.
“At the beginning of 2021, trading on Huobi accounted for roughly 15% of spot volume across the selected group of exchanges below. Today, that share is down to around 5%,” the report indicated, referring to a chart that showed a decreasing percentage of volume being traded on China-centric exchanges, such as Huobi.
While Huobi's market share in bitcoin (BTC) trading volume decreased, exchanges like Coinbase and FTX – which are typically more popular among Western traders - have captured a larger piece of the BTC trade volume.
FTX’s share of bitcoin spot volume increased from 1% to 10% over the course of 2021. At the same time, according to Coin Metrics, Coinbase's share of volume increased from 9% to 14%.
When examining the various exchanges' share of ethereum (ETH) trading volume, they found a similar trend. However, a key distinction was that the proportion of volume transacted on OKX (formerly OKEx), another formerly China-focused exchange, has remained relatively stable.
Coin Metrics mentioned the prior notion that some of the selling pressure observed in the crypto market at the end of last year might have been caused by exchanges shutting down service for mainland Chinese users, leading some users to sell their assets. The firm wrote:
“It is tough to determine, but some have posited that this may in part explain some of the recent selling pressure towards the end of 2021.”
Meanwhile, the paper claimed that in addition to exchange trading volumes, on-chain data supports the notion that activity is flowing west from China.
“The percentage of total BTC and ETH supply on Huobi has fallen considerably,” the report said. According to the report, US-focused exchanges “seem poised to capture an increasing share,” in large part because Bitcoin mining has moved outside of China and towards the United States, which has now become the epicenter of global Bitcoin mining.