After reaching a settlement with the SEC, Binance has managed to maintain its strong market position that it has built over the past 6 years. This is further highlighted by the recent surge in the overall cryptocurrency market in the past two months. Binance remains committed to attracting and retaining users, with a strong desire to win.
Despite facing pressure from the US, with Florida and Alaska banning Binance.US operations, Binance continues to dominate the CEX industry. According to TokenInsight’s “Crypto Exchange 2023 Annual Report,” DeFiLlama, and CoinGecko data, the top 10 cryptocurrency exchanges globally contributed $34.26 trillion in trading volume in 2023, a decrease of about 16% compared to 2022. Binance ranked first in both spot and derivatives trading volumes, with OKX and Bybit coming in second and third, respectively.
In terms of market share, Binance’s share decreased from 54.2% to 48.7% but still maintains its leading position. OKX occupies 16.1% and Bybit occupies 12.3%, both experiencing slight increases since the beginning of the year, but still not surpassing Binance. Recent data from KaikoData shows that Binance’s market share has already recovered to 49% in the past two months.
The decrease in Binance’s market share and the outflow of funds can be attributed to the enforcement actions taken by regulatory bodies such as the SEC and the Department of Justice, especially since the settlement reached with the DOJ in November last year, resulting in a $4.3 billion fine. However, Binance saw a resurgence in fund inflows in December, with a net inflow of $5.4 billion, as the Bitcoin ETF was expected to rise. The total asset value of Binance addresses reached $80.9 billion by the end of January, showing a 28.25% increase compared to the same period last year.
These data indicate the stability of Binance’s internal and external “morale.” Despite the settlement with the US Department of Justice two months ago, Binance remains the largest cryptocurrency exchange by market share. Although its market share has decreased from 54.2% to 48.7% since the beginning of the year, according to TokenInsight’s “Crypto Exchange 2023 Annual Report,” Binance still holds nearly half of the market share, with the remaining 51.2% shared among 9 other major cryptocurrency exchanges, of which only 3 have a market share of over 10%.
Since the establishment of Mt. Gox in 2010, the rise and fall of cryptocurrency exchanges has been an eternal theme. The current top three exchanges, referred to as “B,” “O,” and “H,” have undergone significant changes. Binance remains in the top three, with a significant lead over the second and third exchanges.
In terms of trading volume, Binance’s spot trading volume is $3.77 trillion, while OKX and Bybit have volumes of $0.54 trillion and $0.43 trillion, respectively. In the derivatives market, Binance has a trading volume of $14.32 trillion, with OKX and Bybit at $4.96 trillion and $3.69 trillion, respectively.
In terms of total asset value (TVL) on various chains, Binance’s TVL is $80.9 billion, followed by OKX at $15.5 billion and Bitfinex at $13.7 billion. Binance and OKX have both seen inflows of over $1 billion in the past month, with a total of six exchanges experiencing inflows of over $100 million, including Robinhood and Bybit.
Despite the outflow of funds, Binance’s TVL has remained stable, with fluctuations seen in June and September due to regulatory actions and the termination of a banking partnership. Binance’s TVL reached new highs in December and January, showing growth of 18.80% and 20.74% compared to November. The market share of Binance also increased to 49% during these two months.
The impact of the US Department of Justice’s punishment on Binance is weakening in 2024, as seen in the retention of funds and trading volume. In the past two months, Binance has maintained its leading position in both spot and derivatives trading markets. Despite the challenges, Binance has demonstrated resilience in the cryptocurrency trading market. The launch of new projects on the Binance Launchpool, known for its wealth and flow effects, has attracted a large amount of funds, with approximately 200,000 participants each period.
As the regulatory influence on cryptocurrency exchanges continues in 2024, competition among CEX platforms will also continue. The ability to attract and retain users in the face of market competition and regulatory challenges is crucial for long-term success. Binance’s resilience and continuous efforts to innovate and cater to users’ needs make it a frontrunner in the industry.