Binance Dominance Tested as Rivals Gain Ground – CEX Report

Published: Nov 6, 2023
Written By:
Vignesh Karunanidhi
Milk Road Writer

The centralized cryptocurrency exchange (CEX) landscape has seen some notable shifts over the past year, according to a new market report from blockchain analytics firm 0xScope.

While Binance still retains the top spot by a large margin, its market share across key metrics like trading volume has declined, opening opportunities for other exchanges to gain ground.

  • Binance’s market share has dropped around 10% in the past year as rival exchanges chip away at its dominance.
  • OKX has strengthened its hold on the number two position, especially in derivatives trading.
  • Smaller exchanges like Bybit and Bitget made gains through active listing strategies.
  • Upbit gained significant market share in spot trading thanks to South Korea’s active crypto market.

Binance Stays on Top But Sees Dominance Decline

The report covers data from October 2022 to October 2023 across major centralized exchanges. While Binance still accounts for around 51.2% or more of total market share across various metrics, its position of utter dominance has weakened noticeably.

Binance’s market share of overall trading volume sat at 54.6% in October 2022 but steadily declined over the next 12 months. In the past three months, its share has stabilized around 45%—still firmly in first place, but a significant drop from its previous grip on the market.

The erosion was more pronounced in spot trading, where Binance fell from 62% market share last year to around 40% in recent months. Rival exchanges like Upbit and Coinbase have been among the beneficiaries, gaining ground in spot trading.

OKX Cementing Spot as Number Two Exchange

Behind the giant Binance, OKX has been steadily growing and cementing its place as the clear number two exchange for both spot and derivative crypto trading.

OKX increased its share of total trading volume from 10.5% in October 2022 to 16.1% in the most recent recorded week. It also captured between 5-7% of spot trading volume for most of 2023.

In derivatives trading, OKX has been even more successful. Its market share in this category jumped from 10% last year to around 15% currently.

Smaller Exchanges Grab Share Through Listings

While the top exchanges jostle for position, smaller exchanges have been carving out market share through aggressive listing strategies.

Bybit, Bitget, and MEXC in particular have benefited by quickly listing popular new assets, even if just for a short time before they get added to larger platforms. These rapid listings helped the exchanges boost their spot trading volumes during certain periods.

Certain exchanges with strong regional footholds have also taken advantage of local market conditions to gain share.

Upbit capitalized on South Korea’s active cryptocurrency trading scene. The exchange catapulted from a 5% market share last year to over 15% in recent weeks. Upbit’s performance shows the potential for exchanges dominant in certain countries to compete with the top global platforms.

While trading volume is the most cited metric, 0xScope’s report shows that exchanges’ market share of overall funds and assets paints a different picture.

Binance still leads in overall assets with about 45% market share, but again, its dominance has declined slightly year-over-year as exchanges like OKX and Coinbase have expanded their share. Bitfinex, Coinbase, and Kraken have achieved top-five rankings in terms of funds, but their rankings in overall trading volume are relatively lower.

With Binance still controlling nearly half of trading activity and exchange-based assets, it remains the undisputed leader for now. But the question is whether its declining market share over the past year represents a new normal or just temporary fluctuations.

Rival exchanges have proven adept at gaining market share through competitive listing strategies, localization, and leveraging their derivatives capabilities.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 5 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.