[Background]
Founded back in 2017 by Changpeng Zhao, Binance has cemented its position as the leading digital asset platform, offering a wide range of trading services. The platform provides features such as spot trading, futures, staking, and a non-custodial wallet. Known for its low fees, high liquidity, and robust security measures, Binance also operates its own blockchain, Binance Chain, and native token, BNB.
[Binance’s Market Share Dominance]
Following the collapse of the former main rival FTX, Binance controlled 92% of bitcoin's spot trading volume by the end of 2022, according to Arcane Research. Binance’s dominant position was also elevated by its elimination of trading fees.
Since then, Binance’s market share has decreased, dropping to the current 25.57% of bitcoin's spot volume, while the competition has gradually escalated.
[Competition]
Binance faces competition from various centralized and decentralized platforms, each vying for market share through bespoke features, regional focus, or specialized offerings. Currently, Crypto.com (13.33%), Bitfinex (10.27%), and OKX (10.06%) are Binance's closest competitors.
[CEX versus DEX]
Centralized exchanges (CEXs) are still dominant in digital assets, capturing the majority of global trading volume, while decentralized exchanges (DEXs) held a smaller but growing share.
Based on recent data, CEXs accounted for approximately 80-90% of the total spot trading volume, with DEXs comprising the remaining 10-20%. However, the DEX-to-CEX volume ratio has been increasing, reflecting a slow shift toward decentralization.
[Future Projections]
Binance is well-positioned to retain its market share in the near term due to its scale, liquidity, and ecosystem. However, its long-term dominance is not guaranteed. Ceteris paribus, Binance’s current market leadership will likely persist, if the regulatory and competitive environment remains stable.
Chart by: João Wedson Ferreira.
Written by oinonen_t
