The performance of centralized exchanges (CEX) has become a barometer for measuring the health of the broader crypto market. A cryptocurrency research firm recently published an annual report analyzing the exchange sector’s performance in 2023.
Market Share at Binance
As always, the focus is on Binance, the world’s largest and most popular trading platform by volume. The crypto giant’s market share fell below 50% throughout the year, indicating that it no longer controls a large portion of the market. The cryptocurrency exchange Binance lost 5% of its market in 2023, declining from an initial level of 54.2% to 48.7% by December 31. The report noted that Binance had an average share that rose from around 60% to 52% in the first half of 2023.
However, critical events such as the end of the zero-fee trading program and enforcement actions by regulatory bodies significantly reduced its market dominance. The report highlighted that Binance’s share fell below 50% in the three months following regulatory action against the crypto exchange. Binance had been exposed to continuous regulatory pressures in the US, involving cases of rule violations in both spot and derivative trading operations.
Significant Developments at Binance
Another significant event shook Binance towards the end of last year. Following the departure of its famous CEO Changpeng Zhao (CZ), the exchange’s market share dropped by 32%. However, the FUD gradually subsided, and the largest trading platform’s share rose to 48% by the end of the year. Despite the losses, Binance maintained its dominance in both the spot and derivative markets when analyzed independently. It held a 55% market share in spot transactions, while its derivative market share was 53.7%. OKX and Bybit took the second and third spots in the overall exchange market share with distributions of 16.1% and 12.3%, respectively. Additionally, both CEXs achieved the most significant gains, with their market shares increasing by 4.3% and 2.2%, respectively.
