Centralized exchanges (CEXs) have become an indicator of the broader crypto market’s health. A recent report by a crypto research firm analyzed the exchange sector’s performance in 2023, highlighting Binance‘s fluctuating market share. Despite remaining the largest trading platform by volume, Binance’s dominance has waned, with its market share dropping below 50%, indicating a loss of control over the majority of the market. Initially holding 54.2%, Binance’s share fell to 48.7% by the end of the year, after peaking at around 52% in the first half of 2023.
Critical events such as the end of zero-fee trading programs and regulatory enforcement actions have significantly impacted Binance’s market dominance. The report emphasized a notable decline in Binance’s share to below 50% following three months of regulatory actions. The exchange faced continuous regulatory pressures in the US, including violations in both spot and derivatives trading operations.
A significant development for Binance was the departure of its renowned CEO, Changpeng Zhao (CZ), which led to a temporary 32% drop in market share. However, as fear, uncertainty, and doubt (FUD) subsided, Binance’s share recovered to 48% by year-end. Despite setbacks, Binance maintained its dominance independently in both spot and derivatives markets, with a 55% share in spot and 53.7% in derivatives. OKX and Bybit followed as the second and third largest exchanges by market share, with 16.1% and 12.3% respectively, and both saw significant gains in their market shares.