Binance’s Dominance Shrinks as Competition Heats Up

Binance, the world’s largest cryptocurrency exchange, has lost a quarter of its market share since February. The decline comes amid regulatory crackdowns in the United States and the end of free trading promotions.

In February, Binance was barred from issuing its BUSD stablecoin in New York. BUSD accounted for about 40% of Binance’s monthly trading volume at the time. In March, the Commodity Futures Trading Commission (CFTC) sued Binance for operating an unregistered trading desk.

Binance also ended a free trading promotion in March that had led to a surge in trading volume. “Once those ended, trading volume naturally went down and that obviously impacts their short-term share of the market share,” said Ilan Solot, co-head of digital assets at Marex.

Since Binance removed zero-fee trading for USDT at the end of March, its market share has decreased by 10.8% as of May 20, according to CCData.

Meanwhile, other crypto exchanges are seeing growth in market share. In the same time period, Bullish, OKX, BitMEX, and Bybit grew the most — 1.55%, 1.44%, 1.25%, and 1.04%, respectively.

The decline in Binance’s market share is a sign of the growing competition in the cryptocurrency exchange market. Other exchanges are offering lower fees, a wider range of products and services, and more user-friendly interfaces. Binance will need to innovate and improve its offerings if it wants to maintain its dominance in the market.