Binance Market Dominance Plunges: A Deep Dive Into The 36% Share Drop
October 03 2024 - 9:30PM
NEWSBTC
According to a recent report by Bloomberg, Binance, the world’s
largest cryptocurrency exchange by trading volume, is facing
significant challenges as its market share continues to
decline. In September, Binance’s share of trading volume in
the roughly $2 trillion digital asset market fell to 36.6%, down
sharply from 42.7% at the start of the year and the lowest level in
four years, according to data from CCData. Binance Spot And
Derivatives Trading Hits Four-Year Lows The drop in market share is
particularly pronounced in both the spot and derivatives trading
arenas. Binance’s 27% share of the spot market represents its
lowest level since January 2021, while its derivatives trading
share stands at 40.7%, also the lowest in four years. Related
Reading: Crypto Analyst Maintains $7.50 XRP Target Despite SEC
Appeal Against Ripple Per the report, this decline can be
attributed to the legal saga that the exchange has been
experiencing globally since last year, but particularly in the US,
which has not only had a notable impact on the exchange’s financial
metrics, but has also led to changes in its leadership. The company
has been under increased scrutiny globally, following a settlement
with the US Department of Justice (DOJ) last year over serious
charges, including sanctions violations, which resulted in a hefty
$4 billion fine. The fallout from these regulatory actions
included the resignation of co-founder and former CEO Changpeng
Zhao (CZ), who served four months in prison as part of the
proceedings. However, the former CEO was released by US authorities
last Friday after serving his sentence. In an effort to rebuild
trust and navigate the regulatory landscape, Binance appointed
Richard Teng, a former regulator, as its new CEO. Teng has been
actively engaged with regulators investigating Binance in various
jurisdictions, while also appointing a new board of directors and
the intentions of establishing a new headquarter. Centralized
Crypto Exchanges Face 17% Volume Drop The report further highlights
that the broader market for centralized crypto exchanges is also
facing challenges, with combined spot and derivatives trading
volumes dropping 17% in September. However, this decline is
typical for the month, which is often seasonally weak, but it has
resulted in the lowest monthly trading activity since June.
Notably, Binance has seen the most severe market-share decline
among top exchanges, as competitors such as Bybit, Bitget, and
Crypto.com have begun to capture a larger share of the market.
Related Reading: Crypto Analyst Says Solana-Based BONK Is In Prime
Position For Legendary Rally Jacob Joseph, a senior research
analyst at CCData, noted that this trend may indicate a growing
confidence among crypto participants in alternative platforms that
“offer similar user experiences,” including low trading fees,
minimal slippage, and high market liquidity. Despite the
challenges, Binance recently achieved a significant milestone,
becoming the first centralized crypto exchange to surpass $100
trillion in lifetime trading volume, according to CCData. At
the time of writing, the exchange’s native token, BNB, currently
the fourth largest cryptocurrency on the market, is trading at
$545, up just 1% in the last 24 hours amid the broader market
decline. Featured image from DALL-E, chart from TradingView.com
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