- Bybit’s Bitcoin ETF debut soared to 16% market share, surpassing Coinbase in trading volume.
- Despite regulatory pressures, Bybit, OKX, and Binance held out strong in trading volumes. In particular, Bybit surged 264% to remain potent.
- A low-fee model coupled with a robust derivatives market gives Bybit its competitive edge, challenging Binance and Coinbase globally.
In trading volume, Bybit now replaces Coinbase in second place as the world’s largest crypto exchange. One move behind this is that Bybit launched spot Bitcoin ETFs in the US, seeing its market share grow from 8% to 16%. On an aggregated global basis, relative to this time frame, Coinbase grew just 1% in terms of market share, according to Kaiko.
Competitive Advantage of Bybit
The low-fee business model is one of the reasons behind Bybit’s surge, for its fees are among the most bargain-worthy in the market. It was February 2023 when it introduced 0% costs for trading USDC, and that had attracted many traders. On top of this, the number of Bitcoin and Ethereum trades has grown sharply since Bybit powered into the spot market. Now, the two cryptocurrencies account for 53% of Bybit’s trading volume, up from 17% in the past year.
Moreover, Bybit has developed a strong derivatives market. It became the second-largest derivatives market after Binance by 2023. Bybit maintained a stable open interest share since October, which may be linked to Binance’s regulatory challenges.
Market Dynamics and Regulatory Challenges
Binance, previously the market leader, saw its share decrease from 60% to 54%, despite efforts to mitigate regulatory risks. Even smaller offshore exchanges like Upbit experienced declines. Additionally, Binance recorded declining BTC and ETH volumes, now at 43%, down from 59%. This shift is accompanied by a focus on altcoins.
However, Bybit, OKX, and Binance have seen significant trading volumes since late 2023. Bybit, in particular, demonstrated a 264% growth, aligning with overall activity growth on key exchange platforms. Despite facing regulatory challenges, these exchanges managed to maintain high trading volumes.
Bybit’s Future Prospects
Bybit’s strategic direction and competitive advantages position the company to continue its growth trajectory. Its low fees and zero-fee USDC trading make it attractive to traders. Moreover, its robust derivatives market and aggressive push into the spot market enhance its competitive edge.
Hence, Bybit’s rise reflects its strategic moves and market adaptability. Consequently, it has not only surpassed Coinbase but is also closing in on Binance, defining the future landscape of global cryptocurrency exchanges.
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