Coinbase, an American cryptocurrency exchange, seems to be experiencing a decline in its global trading volume as it faces tough competition following the introduction of spot Bitcoin ETFs in the United States. According to data from blockchain analytics firm Kaiko, Coinbase is no longer the second largest brand in terms of global trading volume. Since October 2023, Coinbase’s market share has dropped from 11% to 8%, while its rival, Bybit, now holds about 16% of the global trading volume.
Bybit’s strategy of lowering trading fees has contributed to its growth in market share, as noted by Kaiko. The firm also suggests that Bybit has benefited from the regulatory issues faced by Binance. Analysts at Kaiko point out that the increase in trading volume on Bybit has been driven by both Bitcoin and Ethereum, with their market share rising from 17% to 53% since last year.
On the other hand, Binance has seen a stronger increase in altcoin volume, although its market share for Bitcoin and Ethereum has declined to 43% this year from 59% a year ago. Kaiko attributes this change to swings in risk sentiment, which tend to decline more during bear markets.
Despite Bybit’s progress, reports have emerged that Wall Street is distancing itself from the exchange. In late May, it was reported that Citadel Securities-backed prime brokerage firm Hidden Road had stopped offering its clients access to Bybit due to a disagreement over the exchange’s KYC/AML procedures. Bybit has not publicly addressed the matter, but a spokesperson for the exchange has stated that they are committed to transparency and will provide further updates as the review progresses.
In a separate development, FTX has filed a lawsuit against Bybit to recover $953 million in assets.