According to data from research firm CCData, the world's largest cryptocurrency exchange Binance saw its total market share in the digital asset market, valued at around $2 trillion, drop to its lowest level in four years in September, shrinking from 42.7% at the beginning of the year to 36.6% at the end of last month.
Data shows that Binance's market share in the spot market is 27%, the lowest since January 2021, while its market share in derivatives trading is 40.7%, also the lowest in four years.
Binance's market share has been declining since March 2023 as it has been struggling to cope with global regulatory actions and increasing scrutiny. Last year, Binance reached a settlement with the U.S. Department of Justice and several other agencies over allegations of sanctions violations, agreeing to pay more than $4 billion in fines, and its co-founder and then-CEO Changpeng Zhao (CZ) resigned and served four months in prison (now released). Binance's new CEO Richard Teng, a former regulator, has been focused on dialogue with regulatory agencies scrutinizing Binance around the world.
September is typically a seasonally weak month for trading markets. According to CCData, the total trading volume of all centralized exchanges in spot and derivatives markets fell by 17% in September, marking the lowest monthly trading activity level since June, with Binance experiencing the most significant decline in market share last month.
Percentage change in market share of centralized exchanges year-to-date (Source: CCData)
CCData's data shows that several smaller centralized competitors, such as Bybit, Bitget, and Crypto.com, have recently gained more market share. CCData senior research analyst Jacob Joseph stated:
"This trend may reflect increasing confidence among cryptocurrency participants in other platforms that offer comparable user experiences, lower trading fees, minimal slippage, and high market liquidity."
CCData noted that earlier this month, Binance became the first centralized cryptocurrency exchange in history to surpass $100 trillion in trading volume.