Binance Sees a Huge Drop in its Market Share
- Binance remains the leading crypto exchange despite the decline in its market share.
- Coinbase and OKX, the next two largest exchanges, only account for 5.60% and 5.39% of the overall spot trading market, respectively.
- Upbit holds 4.77% of the market as of April, up from 2.81% at the start of the year.
Crypto exchange Binance has seen a sharp decline in market share over the last three months as US regulators investigate possible federal law violations. At the height of its dominance in February, Binance held 57.5% of the average monthly volume on cryptocurrency exchanges globally. But CCData, a research firm, reports that Binance’s trade volume sits at 43%. Binance’s spot trading volume reportedly fell to $212 billion in May. The exchange recorded $287 billion in trading volume in April.
Despite this sudden collapse of its market volumes, Binance remains the leading crypto exchange in the world and continues to control the bulk of the market. But the decline in its volume comes as a result of increased competition, heightened regulatory scrutiny of Binance’s operations, and the expiration of a free trading program that made it a popular exchange amongst its rivals.
A Binance spokesperson claimed the exchange “forecasted a drop in market share once we ended our zero-fee BTC trading promotion for most trading pairs. This is not a concern for us. We continue to maintain our strong financial performance.”
The spokesperson further stated that the company’s current objective is to satisfy users with both new and existing products while “continuing to invest in compliance processes for a new era of regulatory certainty.”
Binance has also gone through various operational changes in recent times. Last month, the crypto exchange announced plans to stop its operations in Canada due to new regulations. Reports recently emerged that Binance plans to lay off 20% of its workforce later this month. The exchange denied that such an exercise was being carried out for financial reasons but claimed it was part of its annual evaluation of the quality of its workforce.
With the bull market looking ready to begin, smaller crypto exchanges have made the space more competitive and gained ground. However, Coinbase and OKX, the next two largest exchanges, only account for 5.60% and 5.39% of the overall spot trading market, respectively.
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