According to a Kaiko report, FTX outperformed its rival in terms trading volume in May despite it boasting a record-breaking number of trades.
The discrepancy between trade volume and trades shows that Coinbase’s average trade value was less than that of FTX. The report states that the average trade size for the BTC/USD pair on FTX ($2k), is almost twice as large on Coinbase ($1k).
This milestone is the result of steady growth over the last 18 months. FTX grew from 5% to 44% market share in the past 18 month.
Although Coinbase retained its grip on users, Kaiko analysts reported several smaller exchanges, including Bitfinex, Bitstamp and Bitstamp, lost a significant portion of their market share.
The report states that the trend indicates that the market is consolidating amid long bearish sentiment, with smaller players having difficulty keeping up with their competition.
Coinbase reported another major spike in trade volume last month. However, it failed to surpass the all time highs reached during the sell-off of May 19, 2021 amid China’s Bitcoin crackdown.
They lost 40% and 30% respectively. Major crypto exchanges were experiencing technical issues in high trading activity.
These issues included Coinbase’s ‘intermittent downtime’, a pause in Ethereum-related token withdrawals and Kraken reporting users with ‘connectivity problems’.
Coinbase premium turns negative
The report also highlights Coinbase premium, the difference in hourly Bitcoin prices between Coinbase and Binance’s BTC/USD pair. After being positive for almost six months, this premium changed to negative in May.
Kaiko stated that this metric can be used to gauge institutional sentiment as institutional trading volume accounts over 76% for Coinbase’s trading activity, while Binance is largely retail-driven.
According to the report, another reason for the market shift is the continued volatility of the’s USDT fixedcoin.
USDT was briefly depegged from the greenback last week. Since mid-May, USDT has traded at a persistent, but very small, discount to the USD, leading to a divergence of about $40 in these markets over the past two-weeks.