Last Updated on May 12, 2023 by Bitfinsider

A recent study by the research firm Kaiko revealed that rival cryptocurrency exchanges Huobi and OKX benefited from Binance’s decision to discontinue its zero-fee promotion. Consequently, the cryptocurrency exchange’s market share in the immediate trading of digital assets decreased.

Huobi and OKX were able to capitalize on Binance’s loss and increase their market share, as demonstrated by the study.

This news arrives at a time when the cryptocurrency exchange is already confronting mounting controversies regarding its operations and regulatory compliance, as well as recent problems encountered by its CEO Changpeng Zhao.

Despite being one of the largest and most successful cryptocurrency exchanges in the world, Binance’s recent setbacks have raised concerns regarding the company’s future prospects and ability to navigate the increasingly complex and competitive cryptocurrency market.

According to Kaiko, Binance’s market share of spot-trading volumes has decreased from 73% to 51% since the elimination of the popular zero-fee promotion on March 22, allowing competitors Huobi and OKX to gain market share.

Huobi’s share has increased from 2% to 10%, while OKX’s share has increased from 5% to 9%, according to the same data. A spokesperson for the company said that the decline in market share is not as significant as some of the company’s modeling had predicted.

In addition, the company is investing in compliance processes in preparation for a new era of regulatory certainty. According to Kaiko’s data, in addition to Huobi and OKX, South Korean platforms have seen their market share increase from just under 8% to nearly 14%.

The findings highlight the increasingly competitive nature of the cryptocurrency exchange market and the difficulties encountered by dominant players such as Binance in maintaining their position.

Cici Lu, founder of Venn Link Partners, said that the enforcement in the United States has caused users to become increasingly concerned about the safety of their funds on Binance, prompting them to diversify into other centralized exchanges.

Nonetheless, Zhao has repeatedly assured Twitter users that all funds are secure. However, the trend of consumers moving away from Binance to other exchanges, coupled with the recent decline in market share, presents a significant challenge for the company and its leadership.