Centralized exchanges experienced a significant decline in trading volume in September, continuing a downward trend for the past three months. According to a recent report by researcher CCData, the combined spot and derivatives trading volume on these exchanges dropped by 20.3% to reach $1.67 trillion. This represents the lowest monthly trading volume recorded since December 2022.
The decrease in trading volume can be attributed to a few factors. Firstly, there has been a lack of market volatility, resulting in decreased activity. Additionally, seasonal effects commonly observed in the third quarter have also contributed to the decline. As a result, this has marked the lowest quarterly volumes since the fourth quarter of 2020.
Spot Trading Volume on Binance
The report highlights that spot trading volume on Binance, a leading centralized exchange, experienced a notable decline of 36.8% in September, amounting to $115 billion. This is the lowest monthly volume recorded by the exchange since October 2020 and the third consecutive decline in volumes since June. The recent halt of the zero-fee trading promotion for BTC-TUSD pairs implemented last month has further worsened the decrease in trading volume.
Derivatives Trading Volume on Binance
Binance has also witnessed a decline in derivatives trading volumes. The volume of derivatives trading on Binance fell by 20.8% to $686 billion, marking the lowest monthly volume recorded since December 2020. Despite the decrease, Binance remains dominant in the derivatives market with a market share of 51.5%. However, this figure is the lowest it has been since March 2022.
The overall derivatives trading volume on centralized exchanges has also declined by 17.7% to reach $1.33 trillion in September, representing the lowest monthly derivatives trading volume since December 2020. The market dominance of derivatives trading on these exchanges has reached an all-time high of 79.9%. The decrease in spot trading volume has been more pronounced, which has contributed to the increase in the derivatives market share.
While Binance has experienced a drop in market share since its peak in February, where it reached 65.4%, it still remains the largest venue for derivatives trading with a market share of 51.5%. However, other platforms such as OKX, Bybit, and Bitget have taken advantage of Binance’s decline and increased their market shares to 19.6%, 13.6%, and 9.43% respectively.
Binance’s market share has been on a downward trajectory for seven consecutive months due to factors such as a lack of market volatility and ongoing regulatory challenges. In September, Binance’s spot market share decreased to 34.3%, down from 38.5% the previous month. In the derivatives market, Binance’s market share fell to 51.5% from 53.5% in August and 62.6% in January.
Binance has faced heightened regulatory scrutiny globally since the market turbulence of the previous year. The SEC sued Binance and its CEO in June, alleging “blatant disregard of the federal securities laws” and unveiling 13 charges against the platform, including operating an unregistered exchange. French authorities also conducted a visit to Binance’s office in France last month to investigate allegations of illegal provision of digital asset services and aggravated money laundering. Additionally, Binance was ordered to cease operations in Nigeria by the country’s Securities and Exchange Commission (SEC).
