coinspress.com
The liquidity of $BTC-$USDT and $BTC-$BUSD trading pairs on Binance has significantly dropped by about 70% and 60%, respectively, according to data provided by Kaiko.
Researchers at Kaiko attribute the decline in liquidity to Binance’s recent decision to eliminate its flagship no-fee trading feature for all $BTC pairs except for $BTC/$TUSD. Meanwhile, the $BTC-$TUSD trading pair’s liquidity has impressively increased by over 250% in just 24 hours, from 9 Bitcoin to 29 $BTC.
Binance $BTC-$USDT liquidity has dropped by nearly 70% since zero-fee trading was phased out earlier today
$BTC-$BUSD liquidity has dropped 60% in the same timeframe
$BTC-$TUSD up over 250% (from just 9 $BTC to 29) pic.twitter.com/4Qr39KUIQi
— Riyad Carey (@riyad_carey) March 22, 2023
It’s worth noting that Binance’s implementation of zero fees for Bitcoin pairs, which launched in July 2022, has helped the exchange capture an additional 20% of the market share over the past eight months.
However, Clara Medalie, the research director at Kaiko, observed that Binance quietly wound down $BUSD auto-conversion earlier this month and re-listed the $TUSD stablecoin after de-listing it last September.
Binance just eliminated most zero-fee #$BTC trading.
This is a pretty big deal. Zero fees helped them gain a massive +20% market share since July. pic.twitter.com/nhDqz6sZxH
— Clara Medalie (@Clara_Medalie) March 22, 2023
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Medalie noted that while zero-fee trading is not sustainable in the long run, it enabled Binance to gain significant market share in the short term. She also stated that without zero fees for most $BTC pairs, a short-term drop in market share could be expected.
Despite the recent decrease in liquidity, the market share of zero-fee $BTC pairs on Binance reached an all-time high of 61% last week. Nevertheless, Binance continues to maintain its position as the leader of the crypto spot market, according to CoinMarketCap.