CEX Traffic Takes a Nosedive: Coinbase and Binance Bear the Brunt

A recent analysis on February CEX statistics reveals that Binance and Coinbase experienced a decline of nearly 30% in their traffic. Volumes for spot and derivatives trading have also diminished, indicating hesitance from retail investors.

Both companies seemingly had favorable developments in February; however, they still fell short compared to their rivals. Bearish elements in the cryptocurrency arena could be contributing to a contraction.

Binance and Coinbase Lag Behind Most CEXs

Centralized exchanges (CEXs) play a vital role in the cryptocurrency ecosystem and serve as a significant barometer of its vitality. By the conclusion of 2024, CEX trading volumes surged to $6.4 trillion in Q4.

Nevertheless, widespread market sluggishness is impacting operations. As per a recent report, CEX traffic plummeted as leading companies like Coinbase and Binance faced almost 30% declines.

The industry-wide CEX traffic decreased by roughly 20%, making Binance and Coinbase stand out as evident anomalies. To be fair, both companies managed to slightly surpass the average CEXs in terms of spot trading volume.

However, user traffic is an essential metric for exchanges. It is concerning that both firms fell significantly behind most of their competitors.

Coinbase, recognized as one of the largest CEXs globally, experienced a greater setback than Bybit in February. Bybit encountered the most significant hack in cryptocurrency history towards the end of February, with ensuing traffic losses occurring rapidly thereafter.

By March, a considerable portion of its user base transitioned to Binance, but this shift may not have fully occurred in February.

Even so, in the context of CEX traffic, it’s perplexing that Coinbase is discussed alongside Bybit. The company should ostensibly be thriving, especially after the SEC dropped a major lawsuit in February.

Binance, too, embraced optimistic news, initiating a community vote to list Pi Network that evolved into a comprehensive policy change by March.

In essence, the falling CEX traffic and trade volumes could signify a bearish trend. While OKX grew by 15% and Bitget increased by 6%, most leading exchanges saw significant declines.

This suggests a decrease in market allure for retail investors. Throughout March, poor investor sentiment persisted for an extended period, with US investors spearheading the market sell-off.

Even though Binance and Coinbase both encountered positive news, this hasn’t mitigated the overarching trends affecting all CEXs. Even if Coinbase resolved its legal challenges, its newfound political influence hasn’t improved its standing.

As for traffic, Binance experienced a mild advantage following the Bybit hack, but its listing strategies remain contentious. Fundamentally, the market is engulfed in a climate of fear.