A leading cryptocurrency exchange, Bybit has surpassed Coinbase to become the world’s second-largest cryptocurrency exchange by trading volume, bolstered following the introduction of spot Bitcoin ETFs in the US.
Bybit has gained market share, increasing from 8% to 16%, which pushed out Coinbase earlier this year from the second position. However, even though it has registered higher revenues and profits, Coinbase has gained a meager 1% global market share in the same period, according to a Kaiko report.
At the same time, Binance, the market leader, saw its share decrease from 60% to 54% even though it tried to reduce the impact of regulatory risks in the second half of 2023 through a deal with US regulators. Even the smaller offshore exchanges such as Upbit also declined.
The primary source of Bybit’s seemingly meteoric rise seems to be its low fee model which is among the lowest in the market. It is worth mentioning that Bybit has launched zero fees for trading USDC in February 2023, which adds to the platform’s attractiveness for traders.
Bybit has seen increasing spot trade volumes by a massive leap as Bitcoin and Ethereum trading prices have risen to 53% from 17% a year ago. Binance has recorded declining BTC and ETH volumes, now at 43% from 59%, and shifted more to altcoins.
Thus, while Bybit has been aggressive in its push into the spot market, its derivatives are also well-developed. By 2023, Bybit became the second-largest derivatives market after Binance with a stable open interest share since October. Bybit saw significant growth in the first half of 2023. This could indicate that the exchange benefited from Binance’s regulatory troubles.
Bybit, OKX, and Binance have experienced significant trading volumes since late 2023 even though they faced some challenges from the regulators. Bybit demonstrated an outstanding 264% growth, which is in line with the overall growth of activity on the key exchange platforms.
Bybit’s strategic directions and competitive advantages have placed the company above Coinbase and are nearing Binance, thus defining the further evolution of global cryptocurrency exchanges.
Also Read: Bybit’s Market Share Soars as User Base Hits 30 Million
