Binance, the leading crypto exchange globally, has experienced a significant decline in its market dominance compared to international competitors that do not provide support for the United States dollar in 2023, according to data gathered by the Block Research.
In 2022, Binance concluded the year with a 75% market share within an analysis of platforms that includes prominent Asian participants such as Upbit, Huobi, Bybit, and OKX. Nevertheless, this percentage experienced a consistent decline over the course of the year, reaching 54% in August 2023.
Partial data for the month of September 2023 indicates that Binance’s market share is on track to decrease even further, potentially dropping below 51%, the researchers said.
The world’s largest exchange has faced a challenging year [2023] in terms of regulatory issues, particularly in the United States, where it has been subjected to lawsuits from both the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Furthermore, it has attracted regulatory attention in other parts of the world, notably in France, where it is currently under investigation, and it has opted to withdraw completely from certain markets, including The Netherlands.
In June 2023, the Securities Exchange Commission in Nigeria declared the exchanges’s operations in the country illegal, despite denials from Binance.
“Binance Nigeria Limited is neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal. Any member of the investing public dealing with the entity is doing so at his/her own risk.”
The decline in market share for Binance coincides with a broader decrease in trading volumes across the industry. In August 2023, spot trading volumes across all exchanges amounted to only $423 billion, marking the lowest figure observed since 2020.
This comes as decentralized exchange, Uniswap, strengthens against centralized exchanges. In Q2 2023, Uniswap facilitated approximately $110 billion worth of trades in the second quarter of 2023, $20 billion more than the $90 billion Coinbase handled during the same period.
The CEX’s appear to have faced a more difficult time in the bear market with Coinbase spot trading activity declining 83% from around $540 billion in the fourth quarter of 2021. In contrast, Uniswap’s trading volume decreased by 50%, going from $235 billion during the same period.
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