Binance trading volumes and liquidity have been steadily declining in the first quarter of 2023 amid the spate of U.S. banking failures and after ending its zero-fee promotion.

The result?

It’s led to even more chop for the price of Bitcoin, Kaiko analyst Dessislava Aubert told Decrypt.

Aubert said that “Overall, Bitcoin liquidity on Binance has more than halved relative to the start of February from around $45 million to $16 million in early May.”

The primary reason for the decline in liquidity was the removal of Binance’s 10-month zero-fee promotion for 13 different BTC pairs, which also caused market makers to leave the platform.

Specifically, monthly trading volumes for the exchange’s most-traded pair, BTC-USDT, volume fell from $16 billion in March to $2 billion in April, said the Kaiko analyst.

Aubert added that the drying liquidity “has been more pronounced” after the spate of banking failures earlier this year. The collapse of two key on-ramps for the industry in Silvergate and Silicon Valley Bank also hit specific firms, including Ripple, Circle, Yuga Labs, and many others.

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Author: Liam J. Kelly,Nivesh Rustgi

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