Binance Bitcoin trading volume hits 8-month low after end of zero-fee trading
The world’s largest crypto exchange by trading volume, Binance, recorded its lowest bitcoin trading volume on Sunday since July 4, 2022, according to data from Kaiko.
Volume for 13 trading pairs, which once made up about half of the exchange’s volume, has also fallen to around 30%. The exchange’s global market share, which peaked above 70%, has fallen to around 58%.
Average volumes of the BTC-USDT trading pair have fallen 90%, Kaiko noted.
The declines come after the exchange halted its free trading campaign for the 13 bitcoin spot trading pairs, including BTC-USDT, on March 22. Binance called the promotion temporary. In an email to CoinDesk last week, Kaiko Research Director Clara Medalie wrote that without zero fees, she expected “a short-term drop in market share.”
Binance’s July 8 free trade campaign boosted volume for both Tether USD (USDT), Binance USD (BUSD) and helped Binance increase its market share from 50% to 72%, according to Kaiko DeFi analyst Riyad Carey.
As of mid-March 2023, zero-fee trading volume accounted for 66% of Binance’s trading volume.
Binance phased out fee-free trading last week, with the exception of the trueUSD (TUSD) stablecoin. “It is unclear why Binance has chosen to market its TUSD pair, although it appears that the exchange has chosen the stablecoin as a successor to BUSD, which is being phased out due to regulatory actions in the US,” the report from Kaiko said .
Before zero fees started on July 8, 2022, Binance’s trading market share for the 13 BTC pairs was just 25% before more than doubling. “It has now been only 5 days since the fees were reintroduced and the market share has halved and is currently below 30%,” the report said.
Binance’s global market share is down 10% since last week. The exchange had a two-hour outage last week, the result of a computer error that forced it to halt trading in the spot market and could have contributed to the decline.
In recent weeks, Binance has also endured increased regulatory scrutiny. On Monday, the US Commodity Futures Trading Commission (CFTC) sued the exchange and its founder Changpeng “CZ” Zhao on allegations that the company knowingly offered unregistered crypto derivative products in the US in violation of federal law.
The market share of Tether USD (USDT) on the exchange has fallen from 81% to 68%, while TUSD volumes have seen a slight increase, climbing to $5 million. However, the BTC-TUSD pair only accounts for 2.8% of the total volume.
