According to data from block.co, daily volume across top centralized exchanges has declined in September 2023. By the end of 2022, Binance had established itself as a leader among exchanges that do not facilitate USD trading, commanding an impressive 75% market share.
However, fast forward to August 2023, Binance’s once-strong market dominance has decreased to approximately 54%. Based on available data, analysts anticipate that Binance’s market share will continue to decline, reaching an estimated 50.76% by September 2023.
As Binance experiences a reduction in market share, its competitors Upbit and Huobi are steadily increasing their presence. Upbit’s market share more than doubled since September 2022, going from 6.19% to 14.51% in September 2023. Similarly, Huobi’s market share more than tripled, increasing from 2.83% in September 2022 to 8.58% in September 2023. These trends suggest that users are increasingly favoring rival platforms over Binance.
In September 2022, various crypto exchanges reached a high of $1 trillion in monthly exchange volume, but they experienced a significant decline in September 2023, dropping to a low of $10 billion.
In April 2023, the Daily Exchange Volume days reported a 7-day Moving average of $21.31 billion.
Crypto exchanges hit an all-time high of $50 billion in January 2023 but subsequently reached an all-time low of $10 billion in July 2023.
On the other hand, Coinbase has significantly increased its market share over the past year. The exchange’s market share rose from 25% in September 2022 to around 41% in September 2023. Coinbase’s ascent can be attributed to several factors, notably the departure of FTX from the market in November 2022, leading to a significant migration of users to alternative platforms.
Why is Binance losing its dominance?
Binance and its CEO, Changpeng Zhao (CZ), are currently involved in legal battles with the US SEC and CFTC. The SEC filed a lawsuit against Binance, accusing the company of violating US securities laws. In addition, the CFTC has also accused Binance of violating federal law by not registering as a futures commission merchant (FCM).
The company is also facing an investigation by the French financial regulator and has recently withdrawn from the Dutch market. One possible explanation for the decline in Binance’s market share is the increasing number of regulatory concerns surrounding the exchange.
Additionally, the resignation of its CEO and other senior executives has affected Binance’s US division. The company has also reportedly laid off thousands of employees this year, raising questions about the health of the exchange. Another possible reason for the decline in the exchange’s market share is the discontinuation of zero-fee Bitcoin trading promotions.
When the company introduced this feature in July 2022, it attracted a significant number of new users to the platform. Nevertheless, the discontinuation of these incentives could have played a part in the decline of Binance’s market share.