Centralized Exchange Trading Volumes Decline 17% in September with Binance Market Share at Four-Year Low

Centralized Exchange Trading Volumes Decline 17% in September with Binance Market Share at Four-Year Low

September witnessed a notable drop in trading activity across centralized exchanges, with combined spot and derivatives trading volumes decreasing by 17% to $4.34 trillion, according to the latest report from CCData. This decline marks the lowest monthly trading volume since June, largely attributed to the conclusion of the seasonal trading period, which typically sees reduced market engagement. Both spot and derivatives markets faced declines as traders adopted a cautious approach amid ongoing macroeconomic uncertainty.

Spot trading volumes fell by 17.2% to $1.27 trillion, also representing the lowest level since June. Similarly, derivatives trading volumes on centralized exchanges decreased by 16.9% to $3.07 trillion. However, market analysts remain optimistic about a potential rebound in trading activity in the coming months, fueled by catalysts such as increased market liquidity following a U.S. Federal Reserve interest rate cut and the approaching U.S. presidential election. Historically, the fourth quarter has proven to be the strongest for trading volumes, achieving the highest quarterly figures in six of the last ten years.

Amid this overall market decline, Binance experienced the most significant downturn, with its spot trading volume plummeting by 22.9% to $344 billion. This represents the lowest monthly spot trading volume for Binance since November 2023 and brings its spot market share down to 27%, the lowest level since January 2021. In the derivatives market, Binance's trading volume also fell by 21% to $1.25 trillion, marking its lowest levels since October 2023. Consequently, Binance's share of the derivatives market now stands at 40.7%, the lowest since September 2020. Overall, Binance's combined market share across both spot and derivatives markets has decreased to 36.6%.

In contrast to Binance’s struggles, other exchanges have gained market share. Notably, Crypto.com has experienced significant growth, with its spot and derivatives volumes increasing by 40.2% and 42.8% respectively, achieving all-time highs of $134 billion and $149 billion. As a result, the exchange's combined market share rose to 11% in September, making it the fourth-largest centralized exchange by trading volumes.

Despite the overall decline in trading volumes, open interest surged by 32.1% to $52.4 billion in September. This increase followed the Federal Reserve’s decision to cut interest rates by 50 basis points. With the Fed hinting at further rate cuts in the future, traders have expressed renewed optimism, as evidenced by a rise in the average funding rate for Bitcoin instruments, which increased from 0.70% to 1.21%.