What the numbers say: Binance, the largest crypto exchange by trading volume, retreated to 10-month lows in market share last month, seeing a sharp decline. The platform's market share decreased to 47.84% in April, holding on to the 47% level this month, too. The figure accounts for a nearly 15% drop from the last ten month's highest rates of 62% in March. The trading volume in the platform also simultaneously witnessed a sharp drop, falling by nearly half, from $556.36B in March to $286.61B in April. Relevance: The strong decline was mainly associated with the zero-fee trading campaign of the platform's U.S. arm, Binance.US. The firm launched the campaign in June last year, creating a powerful driving force for both its market share and trading volume in the subsequent months. However, zero-fee trading was halted on Binance in March this year. The halt has caused a higher drop in the popular crypto exchange's market share than expected, as many users gravitated toward alternatives offering trading services with zero fees. Other factors: The increased scrutiny from U.S. regulators, which Binance came under in recent months, was also estimated to have an impact on the platform's trading volumes. In March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO Changpeng Zhao (CZ) with allegations of regulatory violations in seven counts. The company is also under scrutiny by the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and federal prosecutors in the U.S. This strict regulatory approach has created a risk perception in investors towards Binance, paving the way for a decline in Binance's market share. Brands that should care: On the other hand, Binance's several rivals in the centralized spot exchange market, including Coinbase, OKX, Huobi, and Upbit, saw a slight increase in their market share, taking over Binance's pieces of the cake. |
