With decreasing volatility in the market and seasonal effects of the third quarter casting their spell, centralized exchanges have faced a significant downturn in trading volume – a development that has endured for the last three months. The collective trading volume (encompassing both spot and derivative trading) nosedived to $1.67 trillion, dropping by almost 20.3%. A dip of such scale has not been witnessed since December 2022, and then reaching to the lowest quarterly volumes since 2020’s closing quarter.
Binance, one of the leading centralized exchanges, has been at the heart of this downtrend. In September, the spot trading volume on Binance plummeted by 36.8%, coming to a staggering $115 billion. It’s the first dip of this magnitude the exchange has seen since October 2020, continuing a declining trend that commenced in June. This slump was further agitated by the cessation of the zero-fee trading promotion for BTC-TUSD pairs last month.
The derivatives market too has witnessed a downturn in trading volumes on Binance. Recording a decline of 20.8%, the volume reached $686 billion – the lowest since December 2020. Despite the diminishing figures, Binance retains its supremacy in the derivatives market, even though the market share of 51.5% in September was the lowest since March 2022.
The collective monthly derivative trading volume on centralized exchanges slipped by 17.7%, amounting to $1.33 trillion. The market supremacy of derivative trading, however, saw a new all-time high of 79.9% as the decrease was more substantial in the spot trading volume.
Binance’s market share, though reduced by 13.9% from its 65.4% peak in February, remains the biggest venue for derivatives trading, with the figure pegged at 51.5%. Noteworthy here is the opportunistic rise of exchanges like OKX, Bybit, and Bitget, who, leveraging Binance’s decline, have upped their market share to 19.6%, 13.6%, and 9.43%, respectively.
For the seventh straight month, Binance has seen its market share spiralling down because of diminishing market volatility and mounting regulatory challenges. In September, Binance’s spot market share dwindled to 34.3%, down from 38.5% the previous month.
Further woes have been added to Binance with regulatory scrutiny reaching new heights globally since last year’s market instability. Inquiries by authorities, charges by SEC, and allegations of illegal provision of digital asset services and money laundering have stirred a hornet’s nest for the exchange. It remains to be seen how these ongoing developments impact not only Binance but the broader landscape of the crypto-market.
Source: Cryptonews
