Data from research firm Kaiko shows that Binance has lost significant market share in the spot trading market, after the exchange stopped its free campaign. Instead, this has benefited rival businesses like Huobi and OKX.
Previously, Binance boasted a spot trading dominance rate of over 70%. However, according to recent data on Kaiko, Binance's spot trading rate dropped to 51% on May 6. Meanwhile, Huobi's spot trading rate increased from 2% to 10% and OKX increased. from 5% to 9%. According to Kaiko data, the market share of Korean exchanges also increased significantly, increasing from less than 8% to nearly 14%.
Binance CEO Changpeng Zhao said that his exchange may face new difficulties due to volatility and has to deal with escalating regulatory pressure, especially in the United States.
Users are now concerned about the security of their payments due to the US crackdown. According to Cici Lu, founder of Venn Link Partners, said that the increasingly tightening US regulation has made investors nervous. Zhao has repeatedly tweeted to reassure customers that their funds are safe. After the collapse of Terra, FTX and a series of crypto companies last year, there is now a decline in confidence in the crypto market.
A Binance spokesperson stated that “the drop in market share is insignificant.” Getting ready for a new era of regulatory certainty, the representative said, “our main goal right now is to perfect our existing products and services.”
The Binance spokesperson added that the exchange will continue to advance “compliance processes in preparation for a new era of regulatory certainty.” The crypto market is still recovering from the negative volatility of 2022.
Despite a significant gain this year, volume and liquidity remain low as many investors have left the market. However, with macro factors seemingly cooling down, many predict that the crypto market will be active later this year.