Binance's market share has dropped by nearly 15 percentage points in the last few months as the crypto exchange giant says it "don't feel the need" to take more.
Binance had a 62% market share in spot crypto trading volumes in February and that has declined to around 47% this month thus far, according to The Block's Data Dashboard. Nonetheless, Binance remains the largest spot crypto exchange in the world.
"We've got a lot of market share right now. We don't feel the need to capture more market share," Patrick Hillmann, chief strategy officer at Binance, told The Block in an interview last week. "In fact, we want more competition. Competition is good for the marketplace. It's good for the industry."
Binance's declining market share is caused by factors including the exchange recently ending its zero fees on bitcoin trading and overall tepid trading volumes over the past few months.
"We forecasted a drop in market share once we ended our zero-fee BTC trading promotion for most trading pairs," a Binance spokesperson told The Block. "This is not a concern for us. We continue to maintain our strong financial performance."
"Our primary objective is to deliver for our users by maturing our existing products and services and continuing to invest in compliance processes for a new era of regulatory certainty," the spokesperson added.
Binance offered zero fees from last July to March this year on 13 bitcoin pairs, including BTC/USDT, BTC/BUSD and BTC/EUR. The exchange's users, however, can still trade bitcoin against stablecoin TrueUSD (TUSD) for free, according to its website.
Binance's declining market share
Binance's sliding market share has coincided with a decline in overall trading volumes. Monthly crypto trading volumes have been below the $1 trillion mark since last October, according to data compiled by The Block.
Recent U.S. regulatory action against Binance and its co-founder and CEO Changpeng "CZ" Zhao in March might also be a contributing factor.
Meanwhile, Binance rivals including OKX and Coinbase have seen their market share increase a little in recent months.
Earlier this month, Coinbase launched an international derivatives exchange from Bermuda, allowing users to trade perpetual futures with leverage. Earlier today, Coinbase extended a range of services it offers customers in Singapore. The company recently also bolstered its relationship with regulatory authorities in the United Arab Emirates as it faces mounting challenges back home in the U.S.
Binance is 'rooting Coinbase on'
"We're rooting Coinbase on," Hillmann said. "We want them to grow. Seeing them leave the U.S. as a U.S. citizen is really tough for me to see. But if they're going to be able to now grow at the global level because they're able to offshore — fine. We need them to be a big player in the space. They're a good company to have. We need more of those."
In March, the U.S. Securities and Exchange Commission sent Coinbase a Wells notice alerting the exchange to "possible violations of securities laws." In April, Coinbase sued the SEC in order to force the agency to respond to a petition that the company filed demanding the SEC publish specific rules for digital assets. Earlier this week, the SEC called Coinbase's suit "baseless" and said the digital asset industry already has rules and regulations governing it.
Andrew Rummer contributed reporting for this story.
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