Bybit exchange has flipped Coinbase to become the world’s second-largest cryptocurrency exchange.

Following a surge in trading, Bybit became the second-largest centralized crypto exchange (CEX) by trading volume, according to a June 25 report by Kaiko. The report said:

“Since October, the exchange's market share has surged from 8% to 16%, surpassing Coinbase in March to become the second-largest exchange after Binance.”

During the same period, Coinbase’s market share only increased by 1% despite reporting improved profits and revenue.

Bybit’s growing market share could partly be attributed to Binance’s past regulatory issues, which caused the world’s largest exchange crypto exchange to lose some of its dominance over the industry.

Bybit gains traction as Binance loses market share

As Bybit’s market share has grown over 8% during the past eight months, Binance has been losing traction.

Since October, Binance’s dominance fell from 60% to 54%, a 6% decrease, which could partly be attributed to the exchange’s regulatory struggles. According to Kaiko:

“This could indicate that the exchange benefited from Binance's regulatory troubles.”

On Nov. 21, 2023, U.S. officials announced a $4.3 billion settlement with Binance for Anti-Money Laundering violations, marking one of the most significant criminal fines in U.S. history

In June 2023, the SEC sued Coinbase and Binance Exchange for alleged securities violations. In the lawsuit against Binance, the SEC alleged that the company and its founder, Changpeng Zhao, had misappropriated billions of user funds.

Despite the initial allegations, there was no evidence of user fund misappropriation. Binance remains the world’s largest crypto exchange by trading volume.

Did zero-fee USDC trading boost Bybit’s market share?

Similar to other exchanges, Bybit introduced zero-fee trading for Circle's USD (USDC) stablecoin in February 2023, which may have contributed to the increased trading volume.

Overall, Bybit’s average fees are on par with the ones offered by Binance and OKX exchanges, which are some of the lowest fees in the industry, according to Kaiko

The exchange will continue striving for cheap and competitive fees, according to Ben Zhou, the co-founder and CEO of Bybit. He wrote:

"Our commitment to providing competitive fees, a safe and secure platform, and innovative products like Unified Trading Account has resonated with our users."

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