Bitcoin (BTC) is currently experiencing a premium of more than 1% on Binance.US, as the exchange’s trading volume in USD has reached new lows following a lawsuit by the U.S. Securities and Exchange Commission (SEC), according to data from CryptoCompare.
The data reveals that BTC is trading above $26,000 on Binance.US, surpassing the prices on major competitors such as Kraken and Coinbase, which are hovering around $150 as of the time of writing. Despite the premium in BTC price, the USD trading volume on Binance.US has significantly slowed down. The volume has dropped from a peak of over $684 million recorded on March 14 to less than $25 million. This decline can be attributed to the decision of the exchange’s banking partners to halt USD payment channels by June 13. As a result, Binance.US has announced its transition to a crypto-only platform due to regulatory challenges.
Kaiko supports the notion of declining trading activities on Binance.US. Kaiko reported that the exchange’s market share in comparison to other U.S. exchanges has plummeted to 4.8% following the lawsuit, down from 20% in April. In contrast, Coinbase’s market share surged from 46% to 64% within a week after facing its own SEC lawsuit. Kaiko data reveals that Binance.US’ market depth has experienced a sharp decline of 78% within a week of the SEC filing the lawsuit against the company for violating federal securities law. Kaiko noted that the market depth for 17 tokens on the exchange dropped from $34 million on June 4 (a day before the SEC’s lawsuit) to just $7 million.
According to Kaiko, market makers and traders have abandoned the exchange due to concerns about potential asset lock-ups. On June 6, the SEC took action to freeze Binance’s U.S. assets, citing the need to safeguard customers’ funds. Market makers on Binance.US are apprehensive and wish to avoid losses caused by volatility, as well as the non-negligible possibility of their assets becoming inaccessible on the exchange, similar to the FTX collapse.
Binance.US is currently witnessing a premium in Bitcoin price, but its USD trading volume has drastically decreased, prompting the exchange to transition to a crypto-only platform. The SEC lawsuit has caused a decline in market share and market depth, as market makers and traders have left the exchange due to concerns over potential asset lockups.