The decline began when the exchange decided to put an end to its zero-fee campaign for most BTC trading pairs, which gave smaller exchanges time to gain momentum.
Binance, one of the leading cryptocurrency exchanges, has recently witnessed a decline in its market share following its decision to discontinue zero-fee Bitcoin trading. According to a report released by CCData in mid-May, Binance’s market share has been sliding for the second consecutive month, reaching a low of 46.3% in April. This represents the lowest market share the exchange has seen since October 2022.
The decrease in market share can be attributed to Binance’s choice to end its zero-fee promotion for most BTC trading pairs. A spokesperson from Binance confirmed this and stated, “We anticipated a decline in market share after discontinuing our zero-fee BTC trading promotion for most trading pairs. However, this is not a cause for concern, as we continue to maintain strong financial performance.”
Previously, Binance had dominated over 50% of the market share, with some reports even indicating a share as high as 57.5%. Furthermore, the report highlights a significant decline in spot trading on Binance, which dropped by 48.1% to $287 billion in April.
While other major exchanges such as Coinbase and OKX only account for a small portion of the total spot trading market, smaller exchanges have started to gain momentum. For instance, Upbit’s market share increased to 4.77% in April, compared to 2.81% at the beginning of 2023.
Despite the challenges faced by Binance, the spokesperson emphasized that the exchange views competition as a positive force in the industry. They stated, “Binance welcomes and encourages competition as it drives innovation and is beneficial for the overall growth of the cryptocurrency space.”
These recent developments coincide with other changes happening within Binance’s operations. On May 12, the company announced its decision to halt operations in Canada due to new regulatory requirements. Shortly after, reports emerged suggesting that Binance plans to lay off approximately 20% of its workforce in June, contradicting previous statements that no layoffs were anticipated.