Could Binance and Crypto.com Face a Shutdown? DEXs on the Rise

The giants of the crypto exchange world, Binance and Crypto.com, are losing ground in market share to smaller competitors, as demand for decentralized exchanges (DEXs) continues to grow.

Binance, the world’s largest cryptocurrency exchange, experienced a 13% decline in spot trading volume, dropping from a 52.5% market share in October 2023 to the current 39.5%.

Alongside the decrease in spot trading, Binance's derivatives market share also dropped by 8.4%, falling from 50.9% in October 2023 to 42.5%, as reported in the 0xScope research report.

Smaller Exchanges Taking Advantage

The report highlights that smaller exchanges like Bybit, Bitget, and OKX have been capitalizing on Binance’s shrinking market share:

“Bybit, which ranked 7th last year with a 3.2% market share, has now jumped to the 2nd position behind Binance with 8.51%, more than doubling its market share. Meanwhile, OKX, now the third-largest spot exchange, also grew its share from 5.4% to 6.38%.”

Can Binance Be Dethroned?

Bitget's market share grew from 8.2% to 12.7%. According to Gracy Chen, CEO of Bitget, this success is due to increased emphasis on educational initiatives, user-focused improvements, and strategic partnerships:

"Bitget has partnered with prominent athletes like Lionel Messi and supports international sports teams like Juventus, helping build trust, reputation, and attract new users to the platform."

Similarly, centralized exchange (CEX) Crypto.com has also faced declining market share, falling from 15% in October 2023 to below 4% by February 2024. The report notes that this decline coincided with a surge in market share for Binance and Upbit.

DEXs, meanwhile, are becoming a growing threat to CEXs. Over the past year, trading volume on DEXs has "significantly increased," surpassing $250 billion in monthly trading volume in both March and June, marking the first time this milestone was reached since December 2021.

The Rise of Decentralized Exchanges

As of Oct. 17, DEX spot trading volume was equivalent to 13.6% of CEX volume, meaning that for every $1 billion traded on centralized platforms, $136 million was traded on decentralized platforms.

Over the past year, the 22 largest centralized exchanges processed a total of $54 trillion in trading volume. Despite its declining spot market share, Binance still accounted for over $22.5 trillion of that total.

Competitors, however, still face an uphill battle in gaining traction:

“Binance’s market share has trended upwards in recent weeks, and if this momentum continues, rival exchanges like OKX, Bybit, and Bitget will find it more challenging to further increase their market share.”

The report points out that Binance’s market share has been on the rise since the beginning of 2024, with its spot market share staying above 40% for most of the year. Meanwhile, its derivatives market share has fluctuated between 45% and 50%.