Binance market share yields to smaller rivals’ advance
The largest cryptocurrency exchange, Binance, continues to cede some ground to smaller rivals including Bybit, OKX and Bitget. Meanwhile, the decentralized exchanges, or DEXs, are processing an increasing number of trades. According to 0XScope, a research report, Binance’s spot trading volume has fallen from 52.5% to 39.5% over the past year, in keeping with an industry-wide trend.
Shrinking Spot and Derivatives Trading Volumes
Besides the slump in spot trading, Binance’s market share in crypto derivatives has also fallen from 50.9% in October 2023 to 42.5% by October this year. That is a shift that has opened up a big window of opportunity for smaller exchanges, with Bybit doubling its market share to 8.51% and surging into second place behind Binance. OKX and Bitget have also gained ground, the latter riding on strategic partnerships with top athletes and sports teams.
The Rise of DEXs
While Binance and the rest of the CEXs are still at the helm of the crypto space, decentralized exchanges have become a growing force. For the first time since 2021, the volumes of DEX trading have been in excess of $250 billion, moving upwards, and the ratio of DEX-to-CEX trading is also on the increase. In October of 2024, the trading volumes of DEX make up 13.6% of the market, showing increased trust in the utilization of decentralized platforms.
Centralized Exchanges Still Rule in Trading Volume
While DEXs have created a decentralized marketplace, the majority of crypto investors still use centralized exchanges. In fact, 22 of the largest centralized platforms have collectively traded $54 trillion over the past year, $22.5 trillion of which has flowed through Binance. Despite its myriad legal battles and declining market share, Binance remains the single most dominant global CEX.
Binance’s Legal Troubles and Recovery
All the problems Binance has had to face have not been about market competition. In June 2023, the U.S. SEC sued both Binance and Coinbase for alleged securities violations. It was never found that funds were misappropriated, but indeed, Binance faced hefty fines because it broke Anti-Money Laundering laws and had to pay $4.3 billion in settlement. Binance, despite those issues, still holds its leadership position in the crypto space.
