The Removal of Zero-Commission Trading on Binance Causes Drop in Bitcoin Activity
The decrease in Bitcoin (BTC) activity on Binance, a leading cryptocurrency exchange, can be attributed to the removal of zero-commission trading in September. Bloomberg experts have observed a 26% decline in average seven-day volume since the beginning of September. This drop is mainly due to TrueUSD discontinuing commission-free trading of BTC and stablecoins on September 7, resulting in an 89% decrease in the average seven-day volume of this trading pair.
In addition to this, Binance has experienced significant withdrawals amounting to approximately 12,230 BTC worth $330 million since August. Moreover, there has been an outflow of about 198,200 Ethereum (ETH) worth approximately $323 million. Bitcoin represents roughly half of the $1 trillion crypto market, while Ether accounts for about 20%.
Challenges Faced by Binance
Binance’s dominant position in the market is being challenged due to legal actions taken by the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). These actions allege violations of securities laws by Binance. The exchange’s spot trading market share had already fallen from 65% to 58.8% after a previous decrease in trading volume when a zero fees promotion ended in March.
“The current regulatory concerns around the exchange might have driven users to other platforms. Binance’s trading volumes have steadily been declining since it stopped its zero-fee trading promotion for USDT pairs in March.”
Jacob Joseph, Research Analyst at CCData
Furthermore, K33 Research analysts suggest that Binance was the main reason for the industry’s 48% drop in trading volumes in September. However, the future trajectory of the crypto market will depend on cryptocurrency-related events such as the launch of cryptocurrency ETFs and selling pressure from bankrupt companies and the US government, which have become dominant factors influencing the market.
Hot Take: Binance Faces Decline in Bitcoin Activity Due to Removal of Zero-Commission Trading
Binance, a prominent cryptocurrency exchange, has experienced a decline in Bitcoin activity following the discontinuation of zero-commission trading. This change has resulted in a significant drop in average seven-day volume and has impacted the trading pair involving BTC and stablecoins. Additionally, Binance has faced substantial withdrawals of BTC and Ethereum worth millions of dollars.
Furthermore, Binance’s position in the market is being challenged by legal actions from regulatory authorities, causing its spot trading market share to decline. Experts believe that these regulatory concerns may have driven users to other platforms. The decline in Binance’s trading volumes has also contributed to an industry-wide drop.
The future of the crypto market will depend on various factors, including news related to cryptocurrency ETFs and selling pressure exerted by bankrupt companies and the US government.
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