Global cryptocurrency heavyweight, Binance, has seen a consistent drop in its market dominance, particularly over the past seven months.
Recent reports highlight that regulatory issues in the U.S. and changes in their trading promotions may be influencing this decline.
Bloomberg, drawing from insights provided by cryptocurrency data specialist CCData, noted on October 5th that Binance’s spot market share dipped from 38.5% in August to 34.3% in September 2023.
To put this in perspective, in January 2023, the exchange commanded a notable 55.2% of the spot market.
This isn’t limited to the spot market alone. Binance’s presence in the derivatives market is also dwindling.
Data suggests that their market share in this space has reduced from 53.5% in August to 51.5% in September. Earlier in January, Binance held a significant 62% dominance in the derivatives market.
Jacob Joseph, a research analyst from CCData, posits that while the U.S. regulatory challenges are a significant factor, they aren’t the sole reason for Binance’s shrinking market share.
Another contributing element, he suggests, is Binance’s recent decision to stop its zero-fee trading promotion for several major trading pairs.
In tandem with these challenges, Binance has been pulling back from certain global markets.
A significant move in September saw Binance making a complete exit from the Russian market.
The exchange sold its entire Russian business to a new player, CommEx exchange. This was a substantial move as Russian users made up almost 7% of Binance’s traffic.
Additionally, Binance revamped its trading fee structure in early September. They reintroduced a standard taker fee, which is determined by the user’s VIP level.
One example of this change is the 0.1% taker fee on spot and margin trades for regular users.
Competing exchanges have been quick to capitalize on this shift. Binance’s spot trading volume appears to be migrating to platforms like HTX, Bybit, and DigiFinex.
Moreover, exchanges such as OKX, Bybit, and Bitget are seeing upticks in their derivatives market shares.
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