The Chinese crackdown on cryptocurrency-related activities has had a serious impact. As a result, Huobi, which happens to be one of the largest cryptocurrency exchanges in the country, has been introducing stricter restrictions on its platform.
Due to concerns surrounding regulatory policies in China, in order to protect the interests of investors,Huobi had temporarily stopped a major chunk of services in derivatives trading such as futures contracts, exchange-traded products and other leveraged investment products to new users.
This, in turn, has facilitated exposure to other global exchanges as Chinese users now look for alternatives. Binance, for one, may see an influx of new users from the region. Along the same line, the well-known crypto journalist, Colin Wu, speculated,
“Huobi, China’s largest exchange, is afraid of regulation and actively restricts future functions, causing users to go to Binance. Binance’s futures trading volume has surpassed that of other exchanges. However, Binance may be too large to face a similar situation like derivatives exchange Bybit, that is, governments of various countries have successively warned and cracked down.”
Huobi’s diminishing market share in derivatives realm
For a long time, Huobi has battled to clinch the supremacy title in the country. Meanwhile, OKEx, which happens to be another exchange, has dominated the derivatives scene but Huobi, for the most part of 2020, remained tied with the long-standing giant BitMEX. In recent times, however, the market dynamics have changed considerably. While Binance always had more futures volume than Huobi, Wu pointed that the rise in the former’s market share coincided with the decline in the latter’s market share.
According to the latest charts compiled by data provider Skew, Binance was ranked number one, and has dwarfed other derivatives exchanges in terms of Bitcoin futures volume as well open interest [OI], closely trailing behind was OKEx. Huobi, on the other hand, slipped to the fourth position in terms of BTC futures volume and was ranked sixth in respect to BTC open interest.