Binance’s market share drops on CFTC suit and no-fee trading halt: Report

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Cryptocurrency exchange Binance’s dominance in volume market share has eroded over the past two weeks following a lawsuit from US commodity regulators and a decision to suspend some zero-fee trading.

April 4th Newsletter Blockchain analytics platform Kaiko reported that Binance “lost 16% market share in trading volume,” with a market share of 54% at the end of Q1.

On March 27, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance for violating derivatives laws and ignoring regulatory compliance by offering trades to U.S. customers without registration.

Binance still gets more trading volume than its competitors combined, according to Kaiko, but on March 15 decision Closing zero commission spot and margin trading on 13 trading pairs, including multiple fiat and stablecoin trading pairs such as BNB (BNB), Bitcoin (BTC), Ether (ETH), etc. contributed greatly to its downfall.

“Overall, excess volume on Binance has mostly disappeared with the end of zero-fee trading, which is reflected in the even distribution of market share among the remaining exchanges,” said Kaiko. reported.

Kaiko explained that some of this decline was mitigated by the company’s US arm, Binance.US. Binance.US tripled its market share from 8% to 24% in the quarter.

Binance hasn’t fallen excessively in all areas, but the exchange has maintained its derivatives dominance, with just 2% market share last quarter.

Kaiko explained that the decline in trading volume numbers was primarily affected by the termination of zero-fee spot trading as opposed to the CFTC lawsuit.

“If you look at derivatives trading volume, the trend is quite different. Binance has lost only about 2% market share in perpetual futures trading volume. rather than purely lost due to the closing of zero-fee spot trading.”

The drop in market share to 54% is due to Binance being one of the “big winners” in the FTX fiasco, where its trading volume market share climbed to 65% in the last quarter of 2022.

“After November 2022, Binance’s market share increased from 50% to 65%, while OKX’s market share increased from less than 10% to 17%. Meanwhile, Bybit and three smaller exchanges The market shares of Huobi, Bitmex and Deribit fell.”

Of the 17 trading platforms analyzed by Kyco, Upbit was the only cryptocurrency exchange to regain a “substantial share” last quarter.

Related: DEX is growing faster than CEX, but Binance still has 171 million monthly visitors

In light of recent regulatory pressures, banking crises, and the catastrophic collapse of FTX, many reports have observed a growing trend toward decentralized alternatives and self-custody wallets.

Bitcoin and Ether left centralized exchanges in record numbers after the collapse of FTX. His daily trading volume on the decentralized perpetual exchange will also reach $5 billion in November 2022, with TerraLuna Classic (lunch) and its attached TerraClassicUSD (USTC) stablecoin will collapse in May 2022.

Decentralized exchange Uniswap’s trading volume currently rivals cryptocurrency exchanges Coinbase and OKX, but is still a fraction of the size Binance handles.

magazine: Can You Trust Cryptocurrency Exchanges After FTX Crashes?