An Analysis of Binance's Declining Market Share

Binance's waning spot market share has been a heavily discussed narrative of this year. And while it's easy to point to their regulatory woes and executive departures as the driver of this trend, there seems to be a more complex dynamic involving Binance's changing fee promotions throughout the year.

It's no secret that Binance has been facing a lot of pressure, especially as scrutiny over exchanges heated up in the wake of the collapse of FTX. The world's largest spot exchange seemed to be an easy target for regulators across the globe to dig into. In the United States, in particular, Binance got slammed by lawsuits from both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Then, the exchange announced a massive $4.3 billion settlement with the Department of Justice towards the end of the year, which also closed out the CFTC case and saw the former frontman and CEO Changpeng Zhao step down.