Binance's Bitcoin Trading Volume Hits Lowest Level in 8 Months Following Termination of Zero-Fee Trading

Zero-fee trade volume accounted for 66% of Binance’s trading volume in mid-March prior to the decision to eliminate the promotion.

AccessTimeIconMar 27, 2023 at 4:53 p.m. UTC
Updated Mar 27, 2023 at 8:04 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Binance, the world’s largest crypto exchange by trading volume, recorded its lowest bitcoin (BTC) trading volume on Sunday since July 4, 2022, according to data from Kaiko.

Volume for 13 trading pairs, which once accounted for roughly half of the exchange’s volume, has dropped to about 30%. The exchange’s global market share, which peaked at over 70%, has dropped to about 58%.

Average volumes of the BTC-USDT trading pair have plummeted 90%, Kaiko noted.

The declines come after the exchange halted its no-fee trading promotion for the 13 bitcoin spot trading pairs, including BTC-USDT, on March 22. Binance called the promotion temporary. In an email to CoinDesk last week, Clara Medalie, research director at Kaiko, wrote that without zero-fee, she expected “a short-term drop in market share.”

Binance’s zero-fee trading promotion on July 8 increased volume for both tether USD (USDT) and binance USD (BUSD) and helped Binance increase its market share to 72% from 50%, according to Kaiko research analyst Riyad Carey.

Kaiko

As of mid-March, zero-fee trade volume accounted for 66% of Binance’s trading volume.

Binance phased out zero-fee trading last week, with the exception of the trueUSD (TUSD) stablecoin. “It is unclear why Binance has chosen to promote its TUSD pair, although it appears the exchange has selected the stablecoin as a successor to BUSD, which is being phased out because of regulatory actions in the U.S,” the report from Kaiko said.

Before zero fees started, Binance’s trading market share for the 13 BTC pairs was just 25% before more than doubling. “It has now been just 5 days since fees were reinstated, and market share has halved and is currently below 30%,” Kaiko said.

Screenshot 2023-03-27 at 17.29.03.png

Binance’s global market share is down 10% since last week. The exchange suffered a two hour outage last week, the result of a computer bug that forced it to suspend spot market trading and could have contributed to the drop.

In recent weeks, Binance has also endured increased regulatory scrutiny. On Monday, the U.S. Commodity Futures Trading Commission sued the exchange and founder Changpeng Zhao on allegations the company knowingly offered unregistered crypto derivatives products in the U.S. against federal law.

Market share of tether-USD on the exchange has dropped from 81% to 68%, but TUSD volumes have had a small increase, climbing to $5 million. The BTC-TUSD pair, however, accounts for only 2.8% of the exchange's total volume.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.