Binance Witnesses 30% Rise in Trading Activity

The fallout of the crypto exchange FTX, which eroded users' 

Trust in centralized exchanges, has negatively affected the trading volume of the exchanges.

Despite the event, which has resulted in multiple crypto companies filing for bankruptcy, Binance, one of the leading centralized exchanges, saw a 30% spike in trading volumes in the last month.

The evidence of Binance's growth is visible in the initiatives taken by the company in the last couple of weeks. Binance established the Industry Recovery Initiative (IRI) fund to assist crypto projects affected by the liquidity crisis triggered by FTX's collapse. The cryptocurrency exchange alone allocated nearly $1 billion to the IRI fund and encouraged other industry players to do the same.

Binance has started the transparency trend by proposing the release of Proof of Reserves of customer funds. The exchange followed through and reported 101% Bitcoin reserves, covering $9.48 billion in customer assets with reserves worth more than $9.59 billion.

Meanwhile, experts believe that the fallout of FTX is the primary reason behind Binance's spike in trading volume. Because of the meltdown, users are looking for an alternative to hold and trade cryptocurrency. At that time,  Binance was one of the safest bets in the crypto industry, so investors opted for the platform as their only option.

Did the fall of FTX also benefit US-regulated exchanges like Coinbase & Kraken?

Yes! The exchanges like Coinbase & Kraken also witnessed a spike in trading volume in the last month. As we all know, the FTX user base is massive, and as a result of the fallout, users are forced to seek an alternative, which has a positive impact on the trading volume of several exchanges.

However, the surge may not endure long due to users' lack of trust in centralized exchanges. Since the fallout, users have been looking for decentralized exchanges and DeFi products as their future alternatives.

Earlier, CoinGabbar also published an article outlining how CEXs such as Binance will soon provide DeFi products and services in order to regain users’ trust.

Read also: Are Indian CBDCs As Good as Any Other Crypto? What is Different?