Key Points
- Coinbase’s global trading volume market share has decreased, while Bybit’s has increased.
- Bybit’s growth has been attributed to reduced trading fees and Binance’s regulatory issues.
Coinbase, a prominent American cryptocurrency exchange, is witnessing a decline in its global trading volume. This comes amidst the rise of spot Bitcoin ETFs in the U.S. and increased competition within the crypto exchange market.
In terms of global trading volume, Coinbase has been overtaken and is no longer the second largest brand. Data from blockchain analytics company, Kaiko, indicates that Coinbase’s market share has fallen from 11% to 8% since October 2023. In contrast, Bybit, a rival exchange, now holds around 16% of the global trading volume.
Bybit’s Growth and Binance’s Decline
Kaiko attributes Bybit’s market share growth to its strategy of attracting trading volumes by reducing trading fees. However, lower costs were not the sole driver for Bybit’s rise. The exchange also benefited from the regulatory issues faced by Binance.
According to Kaiko’s analysis of spot trade volumes by asset, Bybit’s increased volume has been driven by both Bitcoin (BTC) and Ethereum (ETH). The market share of these two assets on Bybit has surged from 17% to 53% within the last year.
Market Share Shifts
On the other hand, Binance has experienced a significant rise in altcoin volume. Despite maintaining the top position in terms of market share (54%), Binance’s share of Bitcoin and Ethereum originated volume has fallen to 43% this year, down from 59% the previous year. This shift could be due to changes in risk sentiment and is generally more pronounced during bear markets.
Despite Bybit’s growth, Wall Street appears to be distancing itself from the exchange. In late May, reports surfaced that Citadel Securities-backed prime brokerage firm Hidden Road stopped offering its clients access to Bybit due to disagreements over the exchange’s KYC/AML procedures. Bybit has not publicly responded to these reports, but a spokesperson for the exchange stated that the platform is committed to transparency and will provide further updates as the review progresses.
