According to a recent analysis from blockchain data and analytics company Kaiko, greater regulatory scrutiny of the exchange has caused Binance’s market share to fall to a one-year low.
Binance Market Share Fell to One-Year Low
The US SEC accused Binance.US of breaking federal securities laws earlier this month and filed a lawsuit against the company on 13 different charges. The market share that Binance held in spot trading at that time was 56%. It has now decreased to 53.7%, the lowest level since August 2023, according to the most recent Kaiko data, nonetheless.
Daily Market Share Declines After SEC Case
The exchange’s daily market share had also fallen to a low of 47% this year on April 6. This occurred not long after the Securities and Exchange Commission (SEC) of the US filed suit.
On the other hand, a large player in traditional finance, like BlackRock Inc., wants to enter the market and provide regulated Bitcoin exchange-traded funds, which is putting pressure on cryptocurrency exchanges like Binance. However, the goal of these players is to draw in investors who favor doing business with regulated organizations.
Centralized exchanges will find themselves in a squeeze between decentralized exchanges and traditional-finance players entering the market
Alex Svanevik, CEO Of Nansen
Binance Isn’t the Only Exchange Dealing with Regulatory Challenges
According to the Kaiko analysis, Binance’s American affiliate Binance.US has nearly completely lost all of its market shares as a result of the SEC and CFTC’s regulatory action. However, the regulatory assault is not only being felt by Binance, though. With the SEC suing it this month, another US-based cryptocurrency exchange Coinbase saw its market share fall from 7.6% in January 2023 to 6.8% this month.
Binance Still Stands Despite Everything
Binance still outpaces the aggregate size of all other cryptocurrency exchanges, even after seeing a decrease in market share during 2023. Providing a greater pool of liquidity and trading alternatives provides Binance with a competitive edge. Additionally, according to cryptocurrency statistics company DefiLlama, the exchange is the owner of the most customer tokens, with reserves amounting to $59.2 billion.
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