Binance’s move to eliminate trading fees for bitcoin trading, along with the collapse of FTX exchange, has allowed the crypto giant to capture almost 100% of the market share. Binance has steadily increased its presence and trading volumes since 2018, with its market share at 45% at the start of 2022.
However, the elimination of trading fees for makers and takers in June, as well as the bankruptcy of FTX Group in November, pushed users to trade on Binance. CoinDesk reports that Binance’s market share has steadily increased and approached 98% in the past year.
According to Arcane Research, Binance’s market share in bitcoin trading volume increased to 92% by the end of 2022, and has added another 6% since January 2023. In comparison, the American exchange Coinbase took second place with an indicator of about 8%.
Binance’s Dominance in the Crypto Trading Market Raises Serious Concerns Among Experts
Experts in the cryptocurrency market warn that the lack of competition and the absolute dominance of Binance in the spot trading market poses a serious risk factor. They believe that Binance has become too big and concentrating so much trading volume on one exchange is unhealthy. Should Binance fail for any reason, whether it’s regulatory compliance or mistrust from users, it could spell a dark era for retail cryptocurrency, with the possibility of oblivion.
“Binance has become too big and concentrating so much trading volume on one exchange is unhealthy.”. If Binance fails in any way, be it regulatory compliance or mistrust from users, then the retail cryptocurrency could enter a dark era from which one path is to oblivion,” said Edward Moya, Senior Analyst at Oanda.
Recent reports indicate that Binance Holdings plans to leave the market amid increased attention from regulatory authorities, as well as stop doing business with banks and cryptocurrency companies in the United States.