Market Share of Binance Drops 16% Due to Recent Developments

• The end of Binance’s zero-fee trading has been more damaging than the CFTC action.
• Its portion of the market for perpetual futures trades has decreased by just 2%.

Binance, a popular cryptocurrency exchange, has been the target of regulatory scrutiny and a lawsuit from the US Commodities and Futures Trading Commission (CFTC) in the last month on allegations that it violated the CFTC’s derivatives rules.

As a result, Binance saw a significant reduction in its market share of cryptocurrencies, falling nearly 16% in only one week. Kaiko, a blockchain analytics business, argues that the cessation of Binance’s zero-fee trading has been more damaging than the CFTC action.

Although Binance’s share of the spot market has decreased by 16%, its portion of the market for perpetual futures trades has decreased by just 2%. According to Kaiko, the elimination of Binance’s zero-fee spot trading was the primary cause of the exchange’s decline in popularity, not government intervention.

Regulation by Enforcement 

Even after FTX’s demise, Binance was able to increase its market share significantly. Binance’s market share increased from 50% to 65% after November 2022. On Monday, April 3, a widely followed tweet from @cobie spread rumors that Binance CEO Changpeng Zhao may be subject to an “Interpol Red Notice.”

This rumor sent shockwaves across the cryptocurrency market, resulting in instantaneous price adjustments for BNB Coin and BTC. However, it turned out to be a hoax. Binance’s Chief Strategy Officer Patrick Hillmann tweeted, however, to dispel the myth.

Binance, a major cryptocurrency exchange, is in the line of fire in the United States as a result of recent regulatory action. Yet, Binance is not the only company under scrutiny. Major rivals like Coinbase have also been subject to regulatory action like this in recent weeks.