Kaiko: the average daily trading volume for the top 10 crypto tokens fell to $10B in Q2 2023, down from the $18B in Q1 2023, amid the US regulatory crackdown
Context & Ripple Effects
Kaiko's Q2 reading caps a rough stretch for exchange liquidity: just weeks earlier, Binance's market share collapsed from 70% to 54% after the CFTC lawsuit and the end of zero-fee trading, a signal that the US regulatory push was already reshuffling where volume sits. A $10B daily average across the top 10 tokens, down from $18B in Q1, extends that pressure from one venue to the whole large-cap market.
The drop also marks the flip side of the FTX era, when crisis-driven churn pushed November 2022 volume up 23% to $705B — volume has since been bleeding out rather than rotating.
First-order effects
- Large-cap traders face thinner books and wider effective spreads on the top 10 tokens, while exchanges lose the fee base that the Q1 volume supported.
- Binance enters Q3 defending share against both the CFTC action and shrinking overall demand, rather than competing for growth.
Second-order effects
- With less volume to go around, exchanges begin pruning marginal listings — a squeeze Kaiko later quantified at 3,445+ tokens or trading pairs delisted or dropped as inactive in 2023, up 15% from 2022 (the delisting wave).
- Spot liquidity migrates down-market: the same year's data shows decentralized exchanges' monthly spot volume fell 76% YoY to $21B alongside centralized venues' 69% slide (both venue types contracting together), leaving no neutral refuge within spot trading.
Third-order effects
- If the crackdown keeps suppressing legitimate large-cap flow, surviving volume concentrates in fewer tokens and more speculative corners — a pattern Kaiko's later memecoin data, showing ~$80B weekly volume at a post-2021 high, makes concrete.
- Crypto market depth becomes structurally cyclical and event-driven, spiking on crises like FTX's collapse and geopolitical perp-futures surges while baseline regulated-market participation stays depressed — widening what the legitimacy gap between trading activity and durable institutional usage looks like.
The trend: US regulatory pressure is converting crypto's volume engine from broad, continuous spot participation into episodic, speculation-led bursts concentrated in fewer tokens and offshore-friendly venues.