The trading market share of Binance and Crypto.com has declined significantly, while exchanges like Bybit and Bitget have seen substantial growth, indicating intensifying competition in the cryptocurrency market.
The cryptocurrency trading market is witnessing a significant shift as major exchanges like Binance and Crypto.com face increasing competitive pressure from smaller rivals and the rise of decentralized exchanges (DEXs). According to a report by 0XScope, Binance, the world's largest cryptocurrency exchange, has recorded a significant decline in spot trading volume, from 52.5% in October 2023 to 39.5% in October 2024, a 13% drop.
Not only in the spot market, but Binance's derivative trading activity has also been affected, with an 8.4% decline, from 50.9% to 42.5% during the same period. This decline has created opportunities for smaller exchanges like Bybit, Bitget, and OKX to make significant strides. Notably, Bybit has risen from the 7th position with a 3.2% market share to the 2nd position with 8.51%, while OKX, currently the 3rd largest spot exchange, has also seen growth from 5.4% to 6.38%.
Growth strategies of smaller exchanges
The impressive growth of these exchanges is attributed to various factors, including effective marketing strategies, user-centric platform development, and strategic partnerships. Bitget CEO, Gracy Chen, shared that collaborations with renowned sports stars like Lionel Messi and top football clubs like Juventus have contributed to building trust and enhancing brand recognition, attracting a large number of new users.
Besides Binance, many other large exchanges are also struggling to maintain their market share. Crypto.com is a prime example, witnessing a significant decline in market share from 15% in October 2023 to under 4% in February 2024. This highlights the fierce competition and rapid volatility in the cryptocurrency market.
In addition to competition from smaller centralized exchanges (CEXs), Binance and its peers also face challenges from the growing development of decentralized exchanges (DEXs). Over the past year, trading volume on DEXs has increased significantly, surpassing the $250 billion monthly mark in March and June 2024, for the first time since December 2021. As of October 17th, the spot trading volume on DEXs accounted for 13.6% compared to CEXs, indicating the increasing appeal of the decentralized trading model.
Although Binance's market share has shown signs of recovery in recent weeks, the 0XScope report suggests that if the current trend continues, competitors like OKX, Bybit, and Bitget will face greater challenges in gaining additional market share.
