Binance’s spot market share has decreased to 50%, its lowest level since April 2022, said Dessislava Ianeva, a research analyst at the digital assets market data provider Kaiko.
The end of no-fee trading
The world’s biggest crypto exchange has seen its market share decrease after it ended its no-fee program in March. In 2022, Binance suspended trading fees on certain pairs. According to Kaiko, the platform was able to gain over 20% in market share as a result. However, this March, the exchange ended the program for 13 Bitcoin trading pairs, while extending the offer for Bitcoin-TrueUSD.
“We have to wait and see whether this is temporary or a more sustainable shift in trading patterns,” Dessislava Ianeva commented. She added that certain Korean exchanges demonstrated growth at the same time, although it is impossible to identify whether such upticks were caused by outflows from Binance.
“It’s possible that — due to the current regulatory environment — some institutions are taking a wait-and-see approach, staying out of the market, or deploying less funds to other trading venues,” Ianeva added.
CCData, a leading digital asset data provider, reports that Binance’s spot market share dropped to levels seen in November before the collapse of rival FTX. The spot trading volume on Binance decreased by 48% to 287 billion US dollars this April, marking the exchange’s second-lowest monthly trading volume since 2021. CCData says that the company’s overall market share also declined. Experts believe that the rapid decline in BTC spot volumes on the exchange demonstrates that much of its volumes were quite speculative.
Major companies are scaling back their crypto exposure
Other adverse events have also cautioned market players against investing into crypto, at least for some time. Some companies are scaling back their crypto exposure. For example, Jane Street Group and Jump Crypto, two of the world’s leading market makers, are retreating from crypto trading in the US amid the regulatory crackdown.
According to CCData, combined spot and derivatives trading volumes on centralized exchanges fell by nearly 30% to 2.8 trillion US dollars in April. This is the first time in 2023 that trading volumes decreased month-over-month.
