Binance hits multi-year spot volume market share low

Binance's spot volume market share is hitting macro lows, down to 31.69%, the lowest level since July 2020. The growth of the competition, including Crypto.com, ByBit, and Upbit, are outpacing Binance, not to mention the fact that DEX to CEX volume is the highest it has at a 16.7 percent ratio.

Now, this could only be a momentary weakness in the face of the strength of the competition in the bull market, as Binance has been at its strongest during the bear market (late 2022) when market participants moved to the largest entity to avoid potential market failure at smaller CEXes. We will have to see how this plays out in the mid- to long-term.

Binance has been facing regulatory pressures recently (although largely resolved after CZ served a 4-month jail sentence and Binance paid the DOJ 4b fine), which might have stunted its growth. But its competitors have also been variously the targets of regulatory enforcement or the threat thereof, including Kraken, Coinbase, and Crypto.com in the US, UPbit in South Korea, and Bybit too in several jurisdictions as regulators attempt to tame the crypto exchanges.

Binance all-time monthly spot volume market share (source: https://www.theblock.co/data/crypto-markets/spot/cryptocurrency-exchange-volume-monthly)

DEX to CEX spot volume ratio (source: https://www.theblock.co/data/decentralized-finance/dex-non-custodial/dex-to-cex-spot-trade-volume)