U.S. Exchanges Losing Market Share After Regulatory Clampdown

• Recent regulatory clampdown on Binance and Coinbase exchanges has caused US exchanges to lose market share.
• Binance.US had an all-time high of 27% but now stands at 1%. Coinbase’s dominance has also dropped from 56% to 50%.
• Outflows of BTC from both exchanges have been observed, with traders preferring decentralized exchanges over centralized ones.

U.S. Exchanges Lose Market Share After Regulatory Clampdown

Lawsuits against crypto giants Binance and Coinbase triggered a radical shake up in individual exchange market share of volume relative to competition for U.S. exchanges.

Binance.US Sees Market Share Plunge

Binance.US saw its market share plummet to 1%, from an all-time high of 27% recorded recently. This marked a considerable drop on a year-to-date (YTD) basis, as the market share of Binance stood at 8% at the start of 2023.

Market Makers Desert Exchanges

The dearth of liquidity was reflected in the sharp uptick in BTC outflows from Binance since 5 June, per Glassnode. As per CoinGecko, daily spot volume on the exchange collapsed more than 80% since the lawsuit by U.S Securities and Exchange Commission (SEC). Additionally, investors withdrew more than 8,000 BTC tokens from Coinbase on 20 June.

Are DEXes Filling The Void?

As per conventional belief in the crypto space, declining activity on CEXes is seen as a result of investors’ preference for self-custody and switch to decentralized exchanges (DEXs). Reports suggest that DEX volumes have increased significantly over recent months.

Conclusion

Recent lawsuits against major cryptocurrency companies has led to US exchanges losing significant market shares as well as liquidity being sucked out due to traders preferring decentralized exchange over centralised ones.

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