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Trading Volume on Centralized Exchanges Reaches Lowest Level Since December 2022: Report

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Centralized exchanges witnessed a significant decline in trading volume in September, marking the third consecutive month of decreasing activity. 

According to a recent report by researcher CCData, the combined spot and derivatives trading volume on these exchanges dropped by 20.3% to reach $1.67 trillion. 

This figure represents the lowest monthly trading volume recorded since December 2022. 

The decline can be attributed to a lack of market volatility and the seasonal effects typically observed in the third quarter, resulting in the lowest quarterly volumes since the fourth quarter of 2020.

Binance’s Trading Volume Continues to Decline

The report also revealed that spot trading volume on Binance, one of the leading centralized exchanges, experienced a notable decline of 36.8% in September, amounting to $115 billion. 

This marks the lowest monthly volume recorded by the exchange since October 2020 and the third consecutive decline in volumes since June. 

The decrease in trading volume was further exacerbated by the halt of the zero-fee trading promotion for BTC-TUSD pairs implemented last month.

In the derivatives market, Binance also experienced a decline in trading volumes. 

Derivatives trading volume on Binance fell by 20.8% to $686 billion, representing the lowest monthly volume recorded since December 2020. 

Despite the decline, Binance remains dominant in the derivatives market with a market share of 51.5%. However, this figure is the lowest it has been since March 2022.

Overall, the derivatives trading volume on centralized exchanges declined by 17.7% to reach $1.33 trillion in September, marking the lowest monthly derivatives trading volume since December 2020. 

The market dominance of derivatives trading on centralized exchanges has reached a new all-time high of 79.9%. 

While derivatives trading volumes have declined for three consecutive months, the decrease in spot trading volume has been more pronounced, leading to an increase in the derivatives market share.

Although Binance’s market share has dropped by 13.9% since its peak of 65.4% in February, it remains the largest venue for derivatives trading with a market share of 51.5%. 

However, other exchanges such as OKX, Bybit, and Bitget have capitalized on Binance’s decline, increasing their market shares to 19.6%, 13.6%, and 9.43%, respectively.

Binance’s Market Share Drops for Seventh Consecutive Month

Binance’s market share has been on a downward trajectory for seven consecutive months, influenced by a lack of market volatility and ongoing regulatory challenges. 

In September, the exchange’s spot market share decreased to 34.3%, compared to 38.5% the previous month. 

In the derivatives market, Binance’s market share fell to 51.5% from 53.5% in August and 62.6% in January.

Binance has been under heightened regulatory scrutiny globally since the market turbulence of the previous year.

In June, the SEC sued Binance and its CEO for their “blatant disregard of the federal securities laws,” unveiling 13 charges against the platform, including operating an unregistered exchange.

Likewise, French authorities conducted a visit to Binance’s office in France last month. They are investigating allegations of illegal provision of digital asset services and aggravated money laundering.

The exchange was also ordered to cease operations in Nigeria by the country’s Securities and Exchange Commission (SEC).