According to a report by blockchain analytics firm 0xScope, Binance, the top centralized exchange, has seen a decline in its market share over the past year. While still holding a significant position, Binance’s dominance has weakened, with a continuous decrease in trading volume. This decrease is particularly evident in the last three months, resulting in an overall decrease of approximately 10% in market share.
Binance’s Listing Strategy
One possible reason for Binance’s decline is its listing strategy. The report suggests that most popular coins listed on Binance experienced a decrease in value after being added to the exchange. This phenomenon could have contributed to the decrease in trading volume and market share for Binance.
In October 2022, Binance commanded a robust market share of 54.6%. However, over the subsequent year, its dominance gradually receded to approximately 45% after July 2023. While still at the forefront, Binance faced a narrowing gap against key rivals like OKX and other second-tier exchanges such as Bybit, Bitget, and MEXC. Furthermore, emerging threats such as Upbit rapidly gained a market share of nearly 15% in the past three months, posing additional challenges to Binance.
Competition and Changes in Market Share
OKX closely trailed Binance, securing the second spot among all exchanges with a 16.1% share of total trading volume in the latest week. This represents a significant increase from 10.5% a year ago. Coinbase’s market share remained relatively stable throughout the year, fluctuating between 5% and 7%. On the other hand, Bybit experienced notable expansion, with its spot volume share growing from the 2%–4% range last year to the 6%–7.5% range in recent weeks. Other exchanges, including Bitget, MEXC, and others, also maintained healthy growth trends over the past year.
The success of these exchanges can be attributed to their active listing strategies. By diversifying the trading volume away from Binance, they have been able to capture a larger market share. While Binance continues to dominate in terms of asset values, it has experienced a decline of approximately 5% in market share over the past year. Meanwhile, OKX and Coinbase have benefited from this decline, witnessing an increase in their share of funds.
In the dynamic world of cryptocurrency exchanges, Binance is facing a shift in its market share. Recent data shows that Binance’s market share in the broader crypto trading landscape stood at 51.2% in October 2023, slightly lower than its 54.6% share a year earlier. This indicates increased competition, specifically from platforms like OKX. Emerging players such as Bybit, Bitget, and MEXC Global, categorized as “second-tier” exchanges, collectively hold a significant 42.3% market share. This poses a notable challenge to both Binance and OKX, resulting in a reshaping of the competitive landscape.
Furthermore, the addition of new deposit addresses is an important metric for gauging growth and user acquisition efforts. While Binance and Coinbase are experiencing a decline in monthly newly added deposit addresses, OKX has seen a rapid increase in this metric. This surge can be attributed to OKX’s practice of generating multiple deposit addresses for each account, enhancing user functionality.
Nevertheless, Binance and its CEO, Changpeng CZ Zhao, are actively addressing the challenges they face. They have filed a joint motion to dismiss the SEC’s lawsuit, which encompasses Binance US. As the crypto exchange landscape continues to evolve, competition intensifies, regulatory scrutiny increases, adaptability becomes crucial for sustained success.
