Centralized cryptocurrency exchanges (CEXs) Binance and Crypto.com are losing market share to both smaller competitors and the growing decentralized exchange (DEX) sector, according to a recent report from 0xScope. This trend signals a significant shift in the crypto trading landscape, with DEXs gaining momentum and challenging the dominance of traditional platforms.
Binance’s Market Decline
Binance, the world’s largest cryptocurrency exchange, has seen a substantial drop in its market share over the past year. As of October 2024, its spot trading volume fell to 39.5%, down from 52.5% in October 2023—a 13% decline year-over-year. This downward trend extends to Binance’s crypto derivatives market, where its market share dropped by 8.4%, from 50.9% to 42.5%.
Despite these challenges, Binance still remains the top player in the space, accounting for over $22.5 trillion in trading volume over the past year. However, its competitors are catching up.
Smaller Competitors Gaining Ground
The report highlights how smaller centralized exchanges like Bybit, Bitget, and OKX have capitalized on Binance’s declining share. Notably, Bybit surged from seventh place in 2023 to second, increasing its market share from 3.2% to 8.51%. OKX also grew from 5.4% to 6.38%, making it the third-largest spot exchange.
Bitget, which saw its market share rise from 8.2% to 12.7%, attributes its growth to a focus on user education and high-profile partnerships. According to Gracy Chen, CEO of Bitget, collaborations with global athletes like Lionel Messi and partnerships with sports teams such as Juventus have boosted the exchange’s recognition and trust.
Meanwhile, Crypto.com has seen a steep decline, with its market share dropping from 15% in October 2023 to under 4% by February 2024. This decline coincided with Binance’s and Upbit’s increased market share, indicating a reshuffling among major exchanges.
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The Rise of Decentralized Exchanges
While centralized exchanges like Binance continue to dominate trading volumes, decentralized exchanges are gaining traction. DEX trading volumes surpassed $250 billion in March and June 2024, marking the highest levels since December 2021. As of October 2024, DEX spot trading volume reached 13.6% relative to CEX trading, meaning that for every $1 billion traded on centralized platforms, $136 million was traded on decentralized platforms.
This shift toward DEXs signals a growing appetite for decentralized finance (DeFi) solutions and peer-to-peer trading, which offer users greater control over their assets and reduce reliance on centralized entities.
CEXs Still Lead, but DEX Growth Looms
Despite the rise of DEXs, centralized exchanges still account for the bulk of crypto trading activity. The top 22 centralized exchanges processed over $54 trillion in trading volume over the past year. Binance continues to lead with the largest share, but its competitors are closing the gap.
The report suggests that although Binance has been facing challenges, its market share has been trending upward since early 2024, remaining above 40% for most of the year. If this trend continues, smaller rivals like OKX, Bybit, and Bitget will face increased competition as they try to capture more market share in a rapidly evolving landscape.
As Binance and Crypto.com lose ground, the rise of decentralized exchanges and the growth of smaller competitors are reshaping the crypto trading ecosystem. While CEXs still dominate, the continued momentum of DEXs signals a significant shift toward decentralized finance solutions, creating a more competitive environment for centralized exchanges.
