Although Binance continues to dominate the realm of cryptocurrency trading, its trading volumes experienced a staggering decline of over 20% in September compared to the preceding month. In contrast, its competitor, Crypto.com, saw an impressive surge of over 40%.
- According to CCData, last month marked a significant downturn for Binance, as its combined market share in both spot and derivatives trading plummeted to its lowest point since September 2020.
- Overall trading activity in September dwindled to levels not seen since June, though expectations indicate a resurgence as the final quarter approaches, influenced by anticipated Federal Reserve rate cuts.
The Thursday report from CCData highlighted how Binance’s lead over its competitors has shrunk to its slimmest margin in four years, allowing rivals to capture additional market share. Currently, Binance accounts for 36.6% of the total spot and derivatives trading volume on centralized cryptocurrency exchanges, the platform’s poorest performance since September 2020. Its spot trading plummeted nearly 23% from August, causing its market share in this segment to dip to 27%, the lowest since January 2021. Similarly, derivatives trading declined by 21%, resulting in a market share of 40.7% among centralized exchanges, which is the weakest level since September 2020.
As of the publication of this report, Binance representatives have not responded to requests for comments. A notable gainer from Binance’s downturn is Crypto.com, which reported a month-over-month increase of more than 40% in both spot and derivatives trading volume. Year-to-date, this exchange has achieved the most substantial gain in spot trading, boosting its market share to 10.5%.
Overall, trading activity across cryptocurrency exchanges experienced a downturn last month, with both derivatives and spot trading volumes declining by 17%, as highlighted in the report. Historically, September marks the conclusion of a sluggish mid-year trading phase, paving the way for a more active final quarter, according to analysts at CCData. Factors such as heightened market liquidity resulting from the Federal Reserve’s interest rate cuts and the impending U.S. elections are expected to invigorate trading activity on centralized exchanges in the forthcoming months, the report indicated.
The diminishing dominance of Binance aligns with mounting regulatory scrutiny faced by the exchange. In September, the U.S. Securities and Exchange Commission (SEC) filed an amended complaint against Binance, examining its token listing practices. This action followed the regulator’s lawsuit from June 2023, which alleged that Binance functioned as an unregistered broker, clearinghouse, and trading venue while offering unregistered securities. To resolve these allegations, the exchange agreed to pay a staggering $4.3 billion in fines to various U.S. regulatory bodies. Additionally, Changpeng Zhao, the company’s founder and former CEO, pleaded guilty to charges related to violations of the Bank Secrecy Act (BSA) for failing to implement adequate know-your-customer (KYC) protocols at the trading platform. He was released from custody last week after serving four months in prison.
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