Coinbase recently obtained a license to operate in Bermuda, which could impact Binance’s market share in the cryptocurrency exchange market. Binance currently dominates the market with 62% of volumes, but it has recently faced regulatory issues in the United States that have affected its market share.
According to analytics platform Kaiko, Binance lost 16% of its market share over the past months, partially due to the Commodities Future Trading Commission (CFTC) charging the exchange with a long list of regulatory violations.
Coinbase are set to enter the offshore perpetual futures market with the approval of their licence in Bermuda.
— Kaiko (@KaikoData) April 24, 2023
Binance dominate the market currently with 62% of volumes, gaining most of FTX's 11% market share since 2022. pic.twitter.com/MDCNxjGUoC
The majority of the lost market share is attributed to Binance ending its no-fee trading promotion for 13 BTC spot trading pairs, which led to a 2% loss of market share for perpetual futures trade volume. Despite the setbacks, Binance still holds a dominant 54 percent share of the global cryptocurrency exchange sector.
Coinbase makes a move
Coinbase has also experienced a decline in its domestic market share in the United States. According to Kaiko’s numbers, Coinbase’s market share fell from a weekly average of 60% to 49% over the first quarter. Per Kaiko researcher Conor Ryder, the recent move from Coibase comes in response to the loss in market share.
“Coinbase launching an offshore exchange in response to their declining market share of volumes. Their share of total spot volumes has been halved in the last two years from 10% to 5%,” Ryder wrote.
Coinbase’s recent license from the Bermuda Monetary Authority (BMA) allows the company to operate as a digital asset exchange in that territory. This development comes after Coinbase CEO Brian Armstrong expressed concerns about the lack of clear crypto regulation in the United States and hinted at the possibility of moving the exchange out of the country.
As part of its international expansion efforts, Coinbase is also focusing on the Canadian market, hiring Lucas Matheson as country director and signing a Pre-Registration Undertaking (PRU) as a stepping stone to becoming a registered exchange in Canada.
