In September, trading activity on Binance, the world's largest cryptocurrency exchange, dropped significantly, with derivatives trading volume plummeting 21% to $1.25 trillion, a new low since October 2023, and market share falling to 40.7%. Spot trading volume also decreased by 22.9% to $344 billion, with market share falling to 27%. The overall market share dropped to 36.6%, both historically low levels. At the same time, Crypto.com’s trading volume bucked the trend and grew to become the fourth largest exchange. CCData data shows that overall centralized exchange trading volume fell by 17%. Analysts expect trading activity to revive in the coming months as the Federal Reserve cuts interest rates.

Global cryptocurrency exchange Binance has seen a sharp drop in trading activity in September.

The CCData report showed that Binance derivatives trading volume fell 21% to $1.25 trillion in September, the lowest level since October 2023. As activity fell, the exchange's derivatives market share was 40.7% at the end of the month - the lowest level since September 2020.

The downward trend also affected spot trading volumes, which fell 22.9% to $344 billion, the lowest monthly spot volume since November 2023. The decline in spot trading volume caused Binance's market share to fall to 27%, the lowest level since January 2021.

Combining spot and derivatives, the exchange’s overall market share fell to 36.6%, also the lowest level since September 2020.

Despite the drop in trading activity, Binance still leads the global spot trading market in terms of trading volume among centralized exchanges.

Meanwhile, Crypto.com continues to gain ground among centralized exchanges. In September, its spot and derivatives volumes grew 40.2% and 42.8%, reaching $134 billion and $149 billion, respectively. With a combined market share of 11% in September, Crypto.com has become the fourth-largest exchange by trading volume.

Still, overall trading activity on centralized exchanges mirrored Binance’s slump. Total spot and derivatives volumes fell 17% to $4.34 trillion, marking the lowest monthly volume since June.

CCData said the decline was “in line with historical seasonal trends, which typically see a decline in trading activity in the late summer.” Monthly spot volumes on exchanges fell 17.2% to $1.27 trillion, while derivatives volumes dropped 16.9% to $3.07 trillion.

Analysts expect trading activity to recover in the coming months as the Federal Reserve increases its interest rate cuts, which is expected to increase liquidity and capital inflows into risky assets including cryptocurrencies.

“The decline in trading activity signals the end of a seasonal period, while catalysts — including the Federal Reserve’s first rate cut since March 2020 — could spark the next upswing in the current cycle,” the report concluded.