Everything comes to an end, at least that’s what they say. Nothing can last forever, and that is especially true in the crypto industry. No institution or company can maintain market dominance forever. It just has to end someday, and according to reports, Binance is right on the edge of this “someday.”
An October 3 report from CCData shows that the giant Crypto exchange is losing its grip on the market. The report from the digital asset provider also shows that Binance’s competitors are gaining on Binance.
The report showed that Binance processed only 36.6% of the entire spot and derivatives trading volume on centralized trading platforms in September. Although this is still roughly 22% more than its closest competitor, OKX, Binance’s spot trading volume has already dropped by more than 20% in the last month.
Due to that, Binance now has just a 27% share of the spot market, the lowest level of market dominance the exchange has recorded in all seven years of operation since September 2020.
In the derivatives market, Binance is still doing okay. According to the report, Binance had close to 41% market share in September, largely due to a more than 20% decline in derivatives trading on the Binance platform. OKX and Bybit, the next most popular derivatives exchanges, held 18.4% and 15.3% of the market share, respectively.
But it’s not just Binance that’s seeing a decline; there has been a decline generally. Reports show that there has been a broader shrinking of spot and derivatives trading on centralized crypto exchanges. According to the reports, both spot and derivatives trading fell to $4.3 trillion in September, which is a 17% reduction compared to the previous month.
However, the general market aside, Binance has been in deep regulatory hot water for about two years now, impeding the exchange’s plans to onboard more users and reducing its impressive grip on the global market for spot and derivatives.
Among its many regulation problems was its forced pulling out of the Dutch and German markets due to regulators refusing to give Binance the proper licenses to operate in the countries.
The exchange was also forced to leave Canada in May 2023 when Canadian regulators began implementing more stringent crypto regulations.
Binance also faced another set of legal troubles in the United States. Late last year, federal law enforcement and regulators hit the company with charges of violating anti-money laundering laws.
In the same case, Changpeng “CZ” Zhao, Binance’s founder and former CEO, was also slapped with charges and spent several months in prison for his involvement in the Binance case.
Binance will now have to think of new ways to get back its market dominance, although there is also a chance that it may regain a little bit more dominance when the spot market picks up again.
Abimbola Adu
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