Binance Faces Erosion in Market Dominance with 10% Decline in Trading Volume Amidst Rising Competition: Report

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According to the November 6 report by blockchain analytics firm 0xScope, Binance has maintained its position as the top centralized exchange, with a significant market share; however, its dominance has weakened over the past year, with a continuous decrease in trading volume, particularly in the last three months, experiencing a roughly 10% decrease overall in market share.

However, researchers suggest that Binance’s listing strategy may be a reason for the decline, as most popular coins listed on Binance saw a decrease in value after being added to the exchange.

In October 2022, Binance commanded a robust market share of 54.6%, but the landscape shifted over the subsequent year, with its dominance gradually receding to approximately 45% after July 2023. While still at the forefront, Binance faced a narrowing gap against key rivals like OKX and other second-tier exchanges such as Bybit, Bitget, and MEXC

Binance’s challenges extend beyond traditional competitors to include emerging threats such as Upbit, which has rapidly gained a market share of nearly 15% in the past three months.

OKX closely trailed Binance, securing the second spot among all exchanges with a 16.1% share of total trading volume in the latest week (week of October 17, 2023), a notable increase from 10.5% a year ago.

Coinbase’s market share demonstrated relative stability throughout the year, fluctuating between 5% and 7%. In contrast, Bybit experienced a notable expansion, with its spot volume share growing from the 2%–4% range last year to the 6%–7.5% range in recent weeks. Other exchanges such as Bitget, MEXC, and others closely followed suit, maintaining healthy growth trends over the past year.

Active listing strategies have also played a role in these exchanges’ success, diverting a portion of the trading volume from Binance.

While Binance continues to dominate other exchanges in terms of asset values, its market share has undergone a decline of approximately 5% in the past year. OKX and Coinbase appear to be among the primary beneficiaries, each experiencing an uptick in their share of funds during this period.

Binance Continues to Lead the Crypto Exchange Market, but Competitors Gain Ground

In the dynamic world of cryptocurrency exchanges, Binance, which has long been a dominant force, is experiencing a shift in its market share. According to recent data, Binance’s market share in the broader crypto trading landscape, covering both spot and derivative markets, stood at 51.2% in October 2023. This marks a slight decline from its 54.6% share a year earlier, suggesting increased competition from platforms like OKX.

Emerging players such as Bybit, Bitget, and MEXC Global, now categorized as “second-tier” exchanges, collectively hold a significant 42.3% market share. This poses a notable challenge to both Binance and OKX, indicating a reshaping of the competitive landscape.

In contrast, Huobi, along with platforms like Kucoin and Gate, has slipped to the “third-tier” category. The addition of new deposit addresses is often a key metric for gauging the growth and user acquisition efforts of exchanges. While both Binance and Coinbase, two longstanding giants, are seeing a decline in monthly newly added deposit addresses, OKX has experienced a rapid increase in this metric. This surge could be linked to OKX’s practice of generating multiple deposit addresses for each account, enhancing user functionality.

Despite maintaining nearly equal numbers of deposit addresses, totaling over 60% of the entire Centralized Exchange (CEX) market, Binance and Coinbase are facing challenges in attracting new customers, partly due to their established market presence.

The legal hurdles currently faced by Binance, including lawsuits from the SEC and CFTC, are contributing to the decline in its spot market share. However, the exchange and its CEO, Changpeng CZ Zhao, are actively addressing these challenges, filing a joint motion to dismiss the SEC’s lawsuit, which encompasses Binance US.

As the crypto exchange landscape continues to evolve, competition intensifies, regulatory scrutiny increases, adaptability increases, and strategic maneuvers become pivotal for sustained success.

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