Decentralized exchanges are gaining significant traction, presenting a formidable challenge to established cryptocurrency giants like Binance and Crypto.com. Binance, the preeminent force in the crypto exchange world, has experienced a notable contraction in its market share, evidenced by a decline in spot trading volume from 52.5% in October 2023 to 39.54% currently.
While Binance’s spot trading volumes have diminished by over 13% year-over-year, its derivative market share also took a hit. According to a 0XScope research report, Binance's derivatives market share fell from 50.9% last October to 42.5% this year. Meanwhile, smaller competitors have seized this opportunity to expand their reach.
Competitive exchanges such as Bybit, Bitget, and OKX have capitalized on Binance’s waning dominance. Bybit, for instance, catapulted from the seventh position with a 3.2% market share last year to second place with 8.51%. In tandem, OKX, now ranked third in spot exchanges, modestly increased its share from 5.4% to 6.38%.
Bitget's market expansion, growing from 8.2% to 12.7%, owes much to its emphasis on educational initiatives, user-centric enhancements, and strategic partnerships. CEO Gracy Chen attributes part of this success to collaborations with high-profile athletes like Lionel Messi and major global sports teams, such as Juventus, bolstering their platform's trust and recognition.
Like Binance, Crypto.com has also surrendered a significant portion of its market influence. Its market share skidded from 15% in October 2023 to under 4% by February 2024. This coincides with notable market share increases for both Binance and Upbit.
Decentralized exchanges (DEXs) pose an escalating threat to their centralized counterparts (CEXs). The past year saw DEX trading volumes reach unprecedented levels, exceeding $250 billion monthly in March and June for the first time since December 2021.
As of October 17, DEX spot trading volume was 13.6% relative to CEXs, translating to $136 million for every $1 billion traded on centralized platforms.
Despite the rise of DEXs, the top 22 centralized exchanges have processed a staggering $54 trillion in trading volume over the past year. Binance alone accounted for more than $22.5 trillion of this, despite its reduced spot market share.
However, Binance’s rivals face challenges due to the increasing volumes traded on DEXs. The report indicates an upward trend in Binance's market share since early 2024. If sustained, this momentum could complicate the efforts of OKX, Bybit, and Bitget to further capture the market.
The report further highlights that Binance managed to keep its spot market share above 40% for most of the year, with its derivatives market share oscillating between 45% and 50%.