Over the past month, bitcoin (BTC) spot trading volume on Binance, the largest crypto exchange in the world, increased by 5%. That brings the total share of bitcoin traded on Binance to a hefty 98%. In other words; Binance has more or less a monopoly on the bitcoin market. The data comes from Coinalyse.
— Coinalyse (@coinalyzetool) February 19, 2023
Binance has no competition
On February 18, about $6.8 billion worth of bitcoin was traded on Binance via the spot market, so these are not leveraged products such as futures.. The number two on the list, Coinbase, has to make do with a paltry $142.8 million in volume. It shows how big the gulf between exchanges is, and how big Binance’s influence really is.
Binance appears to have gobbled up virtually all of FTX’s market share. The great popularity of Binance compared to Coinbase, for example, is anything but surprising. Coinbase counts on every transaction between five and seven dollars. Binance, on the other hand, has recently started using one zero fee policies on certain trading pairs; no trading fees
When it comes to it total trading volume per exchange, Binance is also head and shoulders above the rest. About $21 billion worth of crypto is traded on Binance every day. On Coinbase, it’s $1.4 billion.
What are the implications for crypto?
While Binance’s monopoly position is easily explained due to the absence of trading fees, it still raises concerns. A diverse and competitive exchange climate where the stock is more evenly distributed would be a healthier sign. It also shows that a large part of the crypto sector stands and falls with one exchange.
We have all seen what the fall of FTX, the consequences of which still reverberate, did to the crypto sector. Binance is also not untouchable. Last week, the exchange was targeted by the US Security and Exchange Commission (SEC). The exchange’s BUSD stablecoin is said to be an unregistered security.
Rumors also briefly circulated this week about suspicious transactions from Binance to a private company owned by CEO Changpeng Zhao. The FTX fiasco has taught us that it doesn’t take much to knock over the first domino. For now, Binance is holding sway.