- October 7, 2023
- Posted by: [email protected]
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Binance, one of the world’s major cryptocurrency exchanges, continues to grapple with dwindling market share as it navigates ongoing regulatory challenges in the United States. According to a report published on October 5 by Bloomberg, citing analysis from cryptocurrency data provider CCData, Binance’s spot market share dropped for the seventh consecutive month in September 2023.
According to the research, Binance’s spot market share declined from 38.5% in August to 34.3% in September. Binance owned a significant 55.2% share of the spot market in January 2023. Binance’s market share declined outside the spot market as its foothold in the derivatives market fell as well. Binance’s derivatives market share fell from 53.5% in August to 51.5% in September, compared to more than 62% at the beginning of the year.
According to CCData research analyst Jacob Joseph, Binance’s regulatory woes in the United States aren’t the sole cause of its market share erosion. Joseph attributed the decline partially to Binance discontinuing its zero-fee trading promotion for major trading pairs, a move that had attracted many traders.
Binance’s market share decrease also coincided with the exchange winding down its operations in several key markets throughout the year. In September, Binance announced its complete withdrawal from Russia, selling its local business to the newly established CommEx exchange, founded by undisclosed entities. Russia was a significant market for Binance, with Russian visitors contributing to nearly 7% of the platform’s overall traffic.
Furthermore, Binance implemented changes to its trading fee structure in early September, reintroducing a regular taker fee based on users’ VIP levels. For instance, Binance began imposing a 0.1% taker fee on spot and margin trades for regular users.
The report noted that the lost spot trading volume from Binance has been redirected to exchanges like HTX (formerly Huobi), Bybit, and DigiFinex. In the derivatives market, rival exchanges such as OKX, Bybit, and Bitget have also reportedly captured additional market share, benefiting from Binance’s market share decline.
As Binance continues to navigate regulatory challenges and adapt its fee structures, the cryptocurrency exchange landscape appears to be experiencing a redistribution of trading activity among various platforms.
