Cryptocurrency exchanges Binance and Crypto.com are losing market share to smaller rivals as decentralized exchanges (DEX) gain momentum.

Binance, the world’s largest crypto exchange, saw its spot transaction volume, which was 52.5% in October 2023, drop by 13% annually to 39.5%.

In line with declining spot transactions, Binance’s crypto derivatives market share also decreased by 8.4% year-on-year, falling from 50.9% in October 2023 to 42.5% in October 2024. The report highlights that smaller exchanges such as Bybit, Bitget and OKX are turning Binance’s declining market share into an opportunity:

“Bybit rose from 7th place last year with 3.2% market share to 2nd place, just behind Binance with 8.51%; It more than doubled its market share. Meanwhile, OKX, currently the third largest spot exchange, increased slightly from 5.4% to 6.38%.”

The increase in Bitget’s market share, from 8.2% to 12.7%, is due to the importance given to education initiatives, user-focused exchange development and recent strategic partnerships.

“Bitget’s collaborations with high-profile athletes such as Lionel Messi and global sports teams such as Juventus build trust and recognition, attracting new users to the platform,” said Bitget CEO Gracy Chen. Binance was one of many leading exchanges that lost the market.

Centralized cryptocurrency exchange (CEX) Crypto.com also experienced a similar decline; While the market share was 15% in October 2023, it fell below 4% in February 2024. The report notes that this decline coincides with increases in Binance and Upbit’s market share. Decentralized exchanges are becoming an increasing threat to CEXs.

Last year, DEX trading volumes became “noticeably larger” and exceeded $250 billion in monthly volume in March and June for the first time since December 2021.

As of October 17, the ratio of DEX spot trading volume to CEXs was 13.6%; This means that for every $1 billion worth of transactions on centralized exchanges, $136 million is traded on decentralized platforms.

Last year, the 22 largest centralized exchanges processed a combined $54 trillion in trading volume.

Despite its declining spot market share, Binance accounted for more than $22.5 trillion of this trading volume. Binance’s biggest rivals are still fighting an uphill battle due to rising DEX trading volumes.

“Binance’s market share has trended upwards in recent weeks, and if this momentum continues, it will be more difficult for rival exchanges such as OKX, Bybit, and Bitget to gain more market share,” the report states.

The report notes that Binance’s market share has been on an upward trend since the beginning of 2024, with its spot market share remaining above 40% for most of the year. Meanwhile, derivatives market share fluctuated between 45% and 50%.