Bybit, the cryptocurrency exchange, has surpassed Coinbase to become the second-largest crypto exchange globally, according to data from Kaiko, a leading crypto analytics platform.
Since October 2023, Bybit has seen its market share surge from 8% to 16%, overtaking Coinbase in March 2024. This rapid growth has been driven by several key factors:
The launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. has been a significant catalyst for Bybit's rise. The introduction of these ETFs has significantly boosted overall crypto trading volumes, and Bybit has been able to capitalize on this increased activity. In contrast, Coinbase only saw a modest 1% increase in market share over the same period, suggesting it did not benefit as much from the ETF launch.
Bybit's competitive fee structure has also been a major draw for traders. The exchange offers one of the lowest fee scales in the industry, which has helped it attract traders away from its competitors. This low-cost model has been a key differentiator for Bybit, as other major exchanges like Binance and OKX have also been offering similar low-fee or even zero-fee promotions.
The growth in Bybit's spot market volumes for Bitcoin and Ethereum has been particularly impressive. The exchange's market share for Bitcoin spot trading jumped from 10% to 31%, while its Ethereum spot volume rose from 7% to 22% between 2023 and 2024, according to Kaiko's data.
In contrast, Binance, the industry leader, has observed a decline in its Bitcoin and Ethereum spot volumes, which now stand at 43%, down from 59% a year ago. This suggests that Bybit has been able to capture market share from the dominant player in the space.
Bybit has also solidified its position as the second-largest player in the derivatives market, trailing only Binance. The exchange particularly benefited from Binance's regulatory challenges earlier in 2023, which allowed Bybit to gain ground in this segment.
The report from Kaiko also notes that Bybit's growth has come at the expense of other exchanges, such as OKX, which experienced a significant reduction in its market share, declining from 25% to 15% during the same period.
Overall, Bybit's rise to become the second-largest crypto exchange globally is a testament to its ability to capitalize on industry trends and offer a compelling value proposition to traders. The exchange's focus on low fees, derivatives, and its ability to benefit from the launch of Bitcoin ETFs have all contributed to its impressive market share gains.
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