Binance, once a dominant force in Bitcoin and altcoin trading markets outside the U.S., is facing a decline in its market share, according to data from Kaiko. The exchange's share of Bitcoin trading outside the U.S. has dropped from 81.3% to 55.3% over the past year, while its dominance in trading smaller tokens and altcoins has decreased from 58% to 50.5%.

The shift in market dynamics is attributed to several factors, including Binance's discontinuation of its large-scale Bitcoin zero-fee promotion and the rise of smaller exchanges such as Bybit and OKX. Bybit's portion of global Bitcoin trading outside the U.S. surged to 9.3%, while OKX's share rose to 7.3%.

While these changes unfold, Bitcoin recently experienced its fourth halving event, leading to mixed short-term impacts. Despite a slight price increase since the event, Bitcoin's average transaction fee surged to an all-time high of $146, surpassing Ethereum's average fee. Funding rates for bitcoin perpetual contracts remained neutral, with open interest exceeding $10 billion.

Amidst these developments, Binance is undergoing efforts to rebuild its reputation under new leadership by Richard Teng. The exchange aims to improve its image amid U.S. regulatory scrutiny by implementing stricter token listing criteria and forming a board of directors.

Geopolitical tensions in the Middle East have increased the demand for safe-haven assets, yet Bitcoin has failed to attract significant inflows, experiencing a 6% drop in April. This trend, attributed partly to the halving and increased short-term volatility, highlights the complex interplay of factors influencing Bitcoin's performance during major market events.

As offshore exchanges expand their reach and regulatory landscapes evolve, Binance's diminishing market dominance underscores the evolving competitive dynamics within the digital asset industry.