Rising Competition in the Crypto Exchange Arena
Despite Binance’s continued leadership in global cryptocurrency trading volume, the 0xScope report highlights a noticeable shift in market dynamics.
Binance still accounts for a significant 51.2% of the Centralized Exchange (CEX) volume share from October 17, 2022, to October 17, 2023. However, this dominance is waning.
In October 2022, Binance’s market share stood at 54.6%, but it has since dropped to approximately 45% as of July. This decline suggests a gradual yet consistent reduction in its market control on a week-by-week basis.
On the other hand, OKX, a rising competitor, has seen its volume share surge impressively. From holding just 10.5% of the market share last year, OKX has grown to 16.1% in the most recent week, firmly positioning itself as the second leading exchange in the market.
Other exchanges like Bybit, Bitget, and MEXC are not far behind, each showing healthy growth trends over the past year. This shift is indicative of a broadening landscape in the crypto exchange market, with these “second-tier” competitors steadily chipping away at Binance’s once unassailable lead.
Shifting Ranks in the Crypto Exchange Market
The 0xScope report’s ranking of crypto exchanges notably excludes major players like Upbit and Coinbase, primarily due to their limited derivatives trading volume. However, in the spot market sector, these exchanges emerge as significant contenders.
Upbit and Coinbase rank as the second and third largest platforms respectively, with Upbit showing a remarkable improvement – its share escalated from 5% to 15% over a 52-week period.
Binance, while still a major player, has seen a significant downturn in its spot market dominance. The report indicates that Binance’s share in the spot market plummeted to 40%, a steep drop from the 62% dominance it held a year ago.
This decline is partly attributed to the exchange’s listing strategy. According to 0xScope, many popular coins experienced a sharp drop in value immediately after being listed on Binance, potentially impacting its market dominance.
Derivatives Market and Legal Challenges for Binance
Binance’s presence in the derivatives market, although more stable than in other areas, has also seen a decline. Its market share in derivatives dropped from 50% to 45% in recent weeks. In contrast, during the same period, OKX’s share in this segment rose from 10% to 15%.
Adding to Binance’s challenges is a critical lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in June. The allegations against Binance range from mismanagement of client funds to the listing of multiple unregistered securities, adding a layer of legal complexity to its operations.
Binance’s On-Chain Presence
An examination of blockchain data reveals that Binance still holds a considerable portion of crypto asset value among centralized exchanges, accounting for 45% — a slight decrease from 50% in the previous year.
However, when evaluating the number of deposit addresses opened at each exchange, Binance’s dominance appears less pronounced. Both Binance and Coinbase have a roughly equal share of about 30% each in this metric. Interestingly, Binance’s share rises back to 40% when considering only active addresses.
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