Bybit has soared past Coinbase to become the world’s second-largest cryptocurrency exchange, a significant milestone reported by Bloomberg. This achievement marks a positive shift in the competitive landscape of crypto trading.
According to a recent report, the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States in October 2023 was a major catalyst for Bybit’s growth. By March, Bybit’s market share had jumped from 8% to 16%, reflecting a substantial increase in trading volume driven by the new financial products. Meanwhile, Coinbase’s market share increased slightly, from 7% to 8%, during the same period.
Several factors contributed to Bybit’s rapid ascent per platform findings. The exchange’s low trading fees and diverse derivatives portfolio attracted cost-conscious traders. Additionally, regulatory challenges for Binance, such as the CFTC lawsuit in March 2023, led to a market share drop from 60% to 54%, allowing Bybit to capture more market share.
Kaiko’s analysis further underscores that the introduction of spot Bitcoin ETFs has significantly boosted global crypto trading volumes. However, the benefits have not been uniformly distributed among exchanges. Bybit, in particular, emerged as a clear beneficiary of this trend.
Even as Binance struck a deal with US regulators in late 2023 to mitigate its regulatory risks, its dominance continued to erode, dropping its market share to 54%. Other exchanges, such as Upbit and smaller offshore platforms, also experienced declines, further highlighting the dynamic shifts within the industry.
Spot trade volumes on Bybit have been driven by significant increases in Bitcoin (BTC) and Ethereum (ETH) trading. These assets’ market share on Bybit surged from 17% to 53% over the past year. In contrast, Binance saw a stronger emphasis on altcoin volumes, with BTC and ETH shares declining from 59% to 43%.
Bybit Expands Services to Overseas Chinese Users Despite Crypto BanAdditionally, Bybit’s growing derivatives market has bolstered its overall market position. In 2023, Bybit became the second-largest derivatives exchange after Binance. While its market share of open interest remained stable since October, significant growth in early 2023 indicates Bybit’s benefit from Binance’s regulatory issues. Conversely, OKX’s market share fell from 25% to 15%.
Bybit’s impressive growth trajectory underscores its strategic prowess and adaptability in a highly competitive market. This marks its rise as a formidable player in the global cryptocurrency exchange arena.
