Research shows that centralized exchanges received the most visits this year from Americans, Koreans, Russians – Exchange Bitcoin News

Residents of the United States, South Korea and Russia have been the most frequent users of centralized exchanges this year, according to a new study. The discovery comes after the spectacular crash of FTX, one of the largest such platforms, amid tight regulations and fewer new users.

US leaders by number of CEX users, Turkey and Japan are also at the top in terms of traffic

The United States, South Korea and Russia together account for 22% of all visits to centralized exchanges (CEX) for cryptocurrencies, according to the annual report “Global Crypto Industry Overview and Trends” for 2022-2023 produced by Huobi Research. The estimate is based on data from the top 100 CEXs on active users, trading depth, trading volume and reliability.

With a share of over 9%, the United States is the clear leader in terms of the absolute number of crypto users generating CEX traffic. South Korea, Russia, Turkey and Japan are next with 7.4%, 6.1%, 5.6% and 3.8% respectively.

The drivers are different in each case – from high unemployment and housing prices turning young people in South Korea and Japan to crypto investments, to Western sanctions for Russians and hyperinflation for Turks.

The authors insist that “centralized exchanges are essential in the cryptocurrency market. These exchanges are usually user-friendly and many crypto newbies start with them.” They also point out that most of the users and liquidity in the crypto market are gathered in centralized exchanges.

However, the findings come in the wake of the crash of FTX, one of the largest CEXs which filed for bankruptcy protection on November 11 amid liquidity problems. The researchers call it the “event of the year since entering the current bear market” and note that it is part of a series, including the collapse of Terra and the bankruptcy of 3AC.

The study further reveals that the total market size of CEXs declined more significantly in 2022 compared to the previous year. The number of unique visitors decreased by 24%. “The continued gloomy market condition and the depreciating assets are both depressing existing users,” elaborates the report. At the same time, the growth of new users decreased to 25 million from 194 million in 2021.

The regulations for centralized exchanges are being tightened in important jurisdictions around the world

Huobi Research also notes that regulations for centralized cryptocurrency exchanges are tightening globally following the FTX bankruptcy, including for on-chain activities, and that regulators may force CEXs to publish proof of funds or require them to maintain an amount in reserve.

This year, US President Biden signed an Executive Order to ensure the responsible development of digital assets, the European Union approved its Markets in Crypto Assets (MiCA) legislation, Russia has worked to expand its legal framework for crypto, and South Korea adopted eight related regulations . .

Against this backdrop, decentralized finance (defi) has become one of the crypto markets with sky-high growth, the author’s highlight. Despite a series of adverse events in that sector as well, the more experienced defi users remain confident in the recovery and long-term value of defi.

With almost 32% of the traffic, the USA also has the largest share in this segment. Brazil is second, with just over 5%, followed by several developed countries, unlike the CEX market, namely the UK, France, Canada and Germany, which experience significant defi traffic.

Do you think centralized exchanges will continue to play a key role as entry points to the crypto space for beginners? Share your thoughts on the topic in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.