Binance Bitcoin trading volume plunges 13% – lowest level in 8 months
Binance’s Bitcoin (BTC) daily trading volume has fallen to its lowest level since July 4, 2022, according to Kaiko data.
Lead Researcher Riyad Carey It pointed out The last time Binance saw such a drop in trading volume was two days before it introduced its zero-fee trading option. According to him, the drop in volume coincided with the end of free trading.
Binance ended the free trading option for most of BTC’s stablecoin pairs on March 22nd — citing recent regulatory issues facing the space. The free trading option increased the exchange’s market share from 50.5% to 72%, accounting for about 61% of total trading volume.
Meanwhile, Binance’s BTC-TUSD market share increased to around 10%, while BTC-USDT trading volume plummeted from 81% to 68%.
Since Binance phased out zero-fee trading, TUSD’s liquidity has increased by over 250%, while stablecoins such as Tether’s USDT and Binance USD (BUSD) have each decreased by over 60%. Did.
Decline in Bitcoin liquidity
Bitcoin has surged about 70% this year, but market liquidity around the flagship digital asset has plunged to its lowest level in 10 months. Market liquidity is how easy it is to trade an asset without affecting its price.
Connor Ryder the silkworm I got it The recent collapse of crypto-friendly banks has severely affected US-based exchanges due to the closure of US dollar payment rails. [are] Their business faces unprecedented challenges. “
According to Ryder, spreads on the US dollar pair have suffered more volatility due to uncertainty surrounding the US cryptocurrency industry. On top of that, these issues have led to an increase in slippage on US-based exchanges.
For context, Coinbase’s BTC-USD 100,000 sell order slippage has increased 2.5x since early March, while Binance’s slippage has barely moved.
Meanwhile, increasingly tight access to the US dollar prompted exchanges to pivot to stablecoins. Kaiko’s data shows that stablecoins now account for 95% of his trading volume on centralized exchanges.
Ryder noted that the conversion to stablecoins would blunt the impact of US banking problems, but that it is affecting the country’s liquidity and could indirectly harm it.