Crypto exchanges Huobi and OKX benefited after rival Binance removed its zero-fee promotion and lost market share in spot trading digital assets, according to data from research firm Kaiko.
Binance's Spot Trading Market Share Drops
Binance's share of spot trading volumes fell from 73% just before the popular promotion was largely removed on March 22 to 51% as of May 6. Huobi went from 2% to 10% and OKX from 5% to 9%. The share of South Korean platforms also increased from 8% to 14%, according to Kaiko figures.
This change could pose another challenge for the exchange's founder, Changpeng Zhao. Zhao's company is facing increasing regulatory pressure, particularly in the US.
Cici Lu, founder of Venn Link Partners, a blockchain consulting firm, said that pressures in the US are causing users to worry about the security of their funds, so they are turning to other centralized exchanges.
Zhao has repeatedly taken to Twitter to say that client funds are safe. Confidence in the digital asset industry has dwindled since last year's crypto crash and FTX collapse.
A Binance spokesperson said the drop in market share was not as great as some modeling predicted, adding that "our primary goal right now is to continue investing in our compliance processes to mature our existing products and services and prepare for a new era of regulatory certainty."
While cryptoassets have made a partial rebound from a $2 trillion drop in 2023, volumes and liquidity continue to be under pressure after investors flee the industry.
*Not investment advice.
