Huobi Research released a "2022-2023 Global Crypto Industry Overview and Trends" detailing the number of centralized and decentralized exchange users across several countries. The research concerns data from 100 centralized exchanges (CEX) considering metrics such as users, trading depth, trading volume, and reliability.
According to Huobi's research, United States, South Korean, and Russian residents account for the most frequent users of centralized exchanges. Similarly, these three countries account for 22% of all visits to CEX for cryptocurrencies.
The data breakdown shows that the United States leads with 9%. It has the absolute number of crypto users generating centralized exchange traffic. South Korea followed the US at 7.4% and Russia at 6.1%. Other countries that top the chart include Turkey and Japan, with 5.6% and 3.8%, respectively.
Furthermore, the drivers of CEX usage vary within these countries. For instance, in South Korea and Japan, the driver includes high unemployment and an increase in housing prices. These conditions have made young individuals seek solace in crypto investments. As for countries like Russia, the Western sanction and hyperinflation in Turks remain the main driver for CEX visits.
However, the number of unique visitors to centralized exchanges dropped by 24%. Significantly, the number of new users stood at 194 million in 2021 and dropped to 25 million in 2022.
One of the highlights of the Huobi research is the importance of CEX. The report's authors emphasized that centralized exchanges are important in cryptocurrency.
They also said CEX is user-friendly and a good starting point for crypto novices. The report added that most of the users and liquidity in the crypto market are aggregated in centralized exchanges.
The Huobi report revealed a decline in the overall market size of CEXs in 2022— compared to 2021. The report attributes this decline to the crypto winter and how it dampens investors' confidence. The authors said, " The continuous gloomy market condition and the depreciating assets are depressing existing users."
Furthermore, the researchers highlighted the FTX collapse, one of the largest centralized exchanges. They consider it "the incident of the year since entering the bear market." It revealed that the FTX crisis had necessitated the tightening of regulations on CEX. The regulations cut across on-chain activities.
Similarly, CEX is now obligated to publicize its proof of funds or is expected to maintain a certain amount in reserve.
Significantly, the countries with the largest number of CEX visitors are rolling out regulatory frameworks. For instance, the US president, Joe Biden, signed an executive order for the responsible development of digital assets.
Similarly, Russia has started working on expanding its legal framework for cryptocurrency, while South Korea recently passed the right crypto-related regulations.
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