At the outset of 2023, Binance, a leading exchange, held a sturdy market share, fluctuating between 52% and 60%. This stability, however, faced an impact after the conclusion of Binance’s Zero-Fee Bitcoin trading promotion in March. Subsequently, in June, the SEC’s 27-page lawsuit against Binance further affected its standing.
Binance’s faces market fluctuation
The crypto market, which experienced a bearish trend from mid-2022 to early 2023, underwent a transformative period. Positive developments such as the Ethereum Shapella upgrade, the introduction of BRC-20 Ordinal, and BlackRock’s Bitcoin spot ETF application contributed to a threefold increase in trading volume, reaching around $1.5 trillion within a month.
The second and third quarters of 2023 witnessed overall market stabilization despite slight declines. Noteworthy events like the Ethereum upgrade and the Bitcoin spot ETF application briefly pushed BTC’s price above $30,000 in late June. However, the excitement faded, leading to a dip in September, with daily trading volume hitting a low of around $200 billion.
The shifts in market sentiment
October brought renewed optimism as the Bitcoin spot ETF application’s approval deadline neared. Traders expressed confidence, leading to increased market activity. In Q4, both trading volume and BTC’s price soared, reaching a peak daily trading volume on November 10th. Despite market disruptions following Binance CEO CZ’s public resignation on November 22nd, Binance’s market share, which had plummeted to 32%, quickly stabilized and gradually rose to around 48% by year-end.
While Binance faced challenges, other exchanges saw significant gains. OKX and Bybit experienced notable increases in market share by 4.3% and 2.2%, respectively. Binance’s dominance remained evident, holding 53.7% of the market share in spot and derivatives trading. Notably, this marked a decrease from 60.1% in 2022, showcasing a shift in the competitive landscape. Binance’s market share saw a decrease from 55.9% at the beginning of the year to 50.4% at year-end. Despite facing regulatory events and market challenges, the drop of only 5.5% exceeded market expectations. OKX emerged as a strong contender, reaching a market share of 19.4%, displaying an increase of approximately 4% from the beginning of the year.
As the crypto market bounced back, Binance faced some tough times but held onto its top spot among exchanges. The crypto world is always changing, and how much of the market each exchange has shows how things are always shifting. Exchanges like Binance have to adjust to new rules and what people feel about the market to stay on top. It’s a bit like a game, and Binance is playing it well even when things get tricky.
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