Amid growing regulatory pressure from US regulators and lawmakers, trading volumes on centralized exchanges have fallen to their lowest levels in more than four years.
According to a report from crypto analytics firm CCData on June 7, the combined spot and derivatives trading volume in May fell 15.7% month-on-month. This marks the second consecutive month that crypto trading activity has declined.
However, this report does not take into account any potential impact from the recent lawsuits the SEC has brought against Coinbase and Binance. The impact of these lawsuits may change the situation and activities of cryptocurrency trading in the near future.
The data from CCData reveals that among all the major exchanges experiencing a decline in trading volume, Binance has been the most heavily affected.
In May, Binance even lost more than its overall market share, dropping to just 43% from its peak of 57% in February. This marks the third consecutive month of declining market share for Binance.
The report suggests that a significant portion of this decline could be attributed to Binance removing fee-free trading for USDT pairs. However, it is important to note that the exchange is certainly feeling the tightening grip of increased regulatory scrutiny from authorities in the United States.
The major beneficiaries of Binance’s market share decline are the cryptocurrency exchanges Bullish, Bybit, and BitMEX, each of which has seen a slight increase of over 1% in market share from March to May.
While the overall trading volume has decreased, primarily due to spot trading, the market share of derivative trading on centralized exchanges has continued to rise, reaching a new record during this period.
According to the report, the derivative market on centralized exchanges now accounts for 79.5% of the overall cryptocurrency market, an increase of 1.2% from 78.3% in April. However, the total derivative volume has decreased by 14.4% in May.