11-7-2023 (LONDON) The race for crypto dominance in the United States, the largest market for digital assets, is heating up as the sector feels the impact of regulatory pressures. The country’s two largest crypto exchanges, Coinbase and Binance.US, have seen a decline in market share this year as rivals Kraken, Bitstamp and LMAX Digital gain ground.
According to data from Kaiko, Coinbase’s market share has fallen from 62% in January to around 51% as of June 18, while Binance.US has plummeted from 22% in March to just 1.5%. The two exchanges have been sued by the US Securities and Exchange Commission (SEC) for violating securities laws, although they deny any wrongdoing.
Kraken has emerged as the new contender, with a market share of around 29%, leaving Binance.US in its wake. Bitstamp’s global market share among exchanges operating in the US has risen to about 9%, while LMAX and Coinbase declined to comment on the data.
The US market is crucial for crypto exchanges, as the majority of trading volume occurs during US trading hours. Regulatory troubles and the collapse of Sam Bankman-Fried’s FTX last year have created crypto chaos, but rivals are seizing this opportunity to gain market share.
According to market players, exchanges can no longer differentiate themselves by offering access to a wide range of coins due to increased regulatory scrutiny. The SEC has argued that most crypto coins are unregistered securities, increasing the risk for exchange operators.
Despite this, the cost-benefit analysis for exchanges could change if crypto token prices rebound, leading to increased interest from investors.
The crypto market is volatile, and the regulatory landscape is constantly evolving. As the race for dominance continues, only time will tell which exchange will come out on top in the US.
