How Kraken emerged as an oasis of growth in 2023
Traders began favoring Kraken following the legal measures against Coinbase and Binance. Kraken held the position of the third-most prominent cryptocurrency exchange worldwide when considering the volume of trades.
Harsh regulations have put centralized crypto exchanges (CEXs) in the United States in a difficult position, as major platforms such as Binance.US and Coinbase struggle with diminishing availability of cryptocurrencies.
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Yet, amidst this despairing situation, a glimmer of hope has appeared. Kraken, the second most prominent cryptocurrency exchange in the United States, stood alone as the sole trading platform that experienced growth in market depth this year, as reported by Kaiko, a digital assets data provider.
The market's capacity to handle big orders without significantly impacting the asset's price is referred to as market depth. In simpler terms, it gauges how much liquidity is available on the platform. As depicted in the chart provided, Kraken surpassed its competitors in the United States market.
This can also be determined by comparing the amount of Bitcoin [BTC] available on various U.S.-centered trading platforms. Although the BTC quantity on Coinbase experienced a significant decrease in May and remained stable in June, the amount on Kraken was continuously increasing.
This suggests that traders favored Kraken following the legal dispute involving Coinbase.
Kraken has managed to increase its trading volume market share in Europe, going from 33% at the start of the year to 54% currently. According to Kaiko, a significant portion of Kraken's market share gains have come at the expense of Binance and Coinbase.
Kraken benefitted from a comparatively lower level of regulatory scrutiny, which seemed to be advantageous for the platform. Unlike Coinbase and Binance.US, Kraken managed to steer clear of any serious legal consequences from the U.S. authorities during the second quarter of 2023.
That being said, it's important to remember that Kraken was forced to halt its Ethereum [ETH] staking initiative in February due to a lawsuit brought forth by the SEC.
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The effect was noticeable in the total trading volumes as well. On June 22, Kraken's daily trading amount reached its highest level in three months according to CoinGecko, as investors began moving large amounts of BTC to benefit from the recent market surge.
Kraken ranked as the world's third most significant cryptocurrency exchange in terms of trade activity, with transactions exceeding a staggering $492 million within the past day.
