Market concentration denotes the degree to which a small number of entities control a significant portion of a particular market. In digital assets, this can involve a few large exchanges dominating trading volume, a limited number of miners controlling hashing power, or a small group of holders possessing a majority of a token’s supply. High market concentration can influence price stability, liquidity, and the overall fairness of market operations. It can also raise concerns about potential manipulation.
Context
Market concentration is a recurring theme in crypto news, often linked to discussions about decentralization and regulatory oversight. Reports analyze the distribution of assets, mining power, and trading activity across various platforms. The discussion frequently addresses the implications for market integrity, price discovery, and the resilience of the ecosystem against coordinated actions. Regulators also scrutinize market concentration for anti-competitive practices and systemic risk.
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