Binance, once considered the undisputed leader in the centralized crypto exchange market, has experienced a decline in its dominance over the past year, according to a recent report from 0xScope. The report highlights a decrease in Binance’s trading volume and overall market indicators, while highlighting the increasing competition from second-tier exchanges such as OKX.
The report from 0xScope indicates that Binance’s share of global crypto volume, accounting for 51.2% of CEX volume share, remains substantial. However, the gradual decline of Binance’s dominance in recent months suggests that other exchanges are gaining ground. OKX, in particular, has witnessed a significant surge in trading volume, establishing itself as a solid competitor to Binance.
While OKX leads the pack among the second-tier exchanges, other platforms like Bybit, Bitget, and MEXC have also displayed healthy growth trends in the past year. This growth trajectory indicates that Binance is facing increasing competition from multiple fronts. It is worth noting that major exchanges such as Upbit and Coinbase were excluded from the ranking due to their lack of derivatives trading volume. However, these exchanges continue to hold significant positions in the spot market, with Upbit’s market share experiencing remarkable growth within a 52-week span.
One possible factor attributed to Binance’s decline is its listing strategy. The report suggests that popular coins listed on Binance experienced a decline in value shortly after their listing, which may have affected overall trading volume and investor sentiment. Additionally, Binance faced a critical lawsuit from the U.S. Securities and Exchange Commission (SEC) in June, alleging mismanagement of client funds and listing unregistered securities. This legal challenge could have further eroded the exchange’s reputation and market position.
While Binance experienced a decline in spot market dominance, its derivatives volume has maintained more stability. However, even in this sector, Binance witnessed a decrease from 50% earlier in the year to 45% in recent weeks. On the other hand, OKX’s derivatives volume share rose from 10% to 15% during the same period, further indicating the growing competition from its closest rival.
When considering the overall crypto asset value, Binance still holds a significant portion at 45%. However, this is a decline from the previous year’s figure of 50%. Notably, Coinbase and Bitfinex emerge as strong competitors in this realm, with Bitfinex’s affiliation with Tether, holding $85 billion in reserves, boosting its market presence.
The report highlights that Binance’s dominance is influenced by the number of deposit addresses opened at the exchange. While both Binance and Coinbase hold roughly equal weightings at around 30%, Binance’s market share increases to 40% when considering only active addresses. This suggests that Binance may have a higher level of user engagement and activity compared to its competitors.
Despite Binance’s continued position as a leader in the global crypto volume share, it is facing increasing challenges from second-tier exchanges such as OKX. The decline in its dominance over the past year, coupled with legal issues and potential listing challenges, have contributed to a changing landscape in the centralized crypto exchange market. Binance must adapt and innovate to stay competitive in this evolving industry.