The Market for Centralized and Decentralized Cryptocurrency Exchanges Has Undergone Dramatic Changes

The market for centralized cryptocurrency exchanges (CEXs) has undergone dramatic changes since last year.

A 0xScope report has shown that the market for centralized cryptocurrency exchanges (CEXs) has seen some dramatic changes over the last year.

After Bitcoin (BTC) exchange-traded funds were approved in January and Ethereum (ETH) in July, institutional investment in Web3 began to ramp up in early 2024. Bitcoin reached a new all-time high, surpassing $73,000 in March 2024, followed by another halving a month later. For most of this year, the total value of the cryptocurrency market has exceeded $2 trillion, which is more than in 2021.

There has also been a surge in activity on centralized cryptocurrency exchanges.

The 0xScope report uses data for the period from Oct. 9, 2023 to Oct. 9, 2024. It includes the 22 largest centralized exchanges (by total market volume): Binance, OKX, Bybit, Bitget, MEXC Global, Gate.io, Crypto.com, Huobi, KuCoin, Upbit, Coinbase, Bitrue, LBank, Kraken, CoinEx, BitMEX, Bitstamp, BtcTurk Pro, bitFlyer, Gemini, Binance US, and Coinone.

The total trading volume on these CEXs during the period amounted to $54 trillion. And the total spot trading volume over the past 12 months amounted to $14.6 trillion. As expected, Binance remains the leader with a volume of $5.78 trillion or 39.54% of the market. However, the loss of Binance’s market share is most noticeable in spot trading: -13% year-on-year.

Half of the 22 exchanges allow trading in crypto derivatives. These exchanges processed a total derivatives trading volume of $39.38 trillion over the past 12 months, almost three times the total spot trading volume.

Coinbase and Upbit, two exchanges with large spot trading volumes, are not included in the analysis of derivatives trading in this report. Upbit does not support derivatives trading due to a ban in South Korea. Meanwhile, Coinbase supports derivatives trading through its subsidiary Coinbase International Exchange.

The three exchanges below were the biggest reasons for Binance’s leadership decline:

OKX, Bybit, and Bitget remain the second, third, and fourth largest exchanges in the world, respectively. MEXC Global is firmly in fifth place, despite a decline in market share from 6.9% to 4.1% year-on-year.

What happens on decentralized exchanges (DEX)

Ethereum’s dominance is declining with TVL (total blocked value) increasing in protocols built on other networks such as Bitcoin, BNB Chain, Solana, Tron, and several Layer 2 (L2) networks.

Over the past 12 months (October 2023 — October 2024), trading volumes on DEX have increased significantly. In March 2024, DEX collectively processed more than $250 billion in trades for the first time since December 2022. The same situation repeated itself three months later in June 2024.

As of October 17, 2024, the ratio of DEX spot trading volumes to CEX was 13.6%. In other words, for every $1 billion of spot trading on CEX, there was $136 million of trading on DEX.

Tokens of centralized exchanges

BNB is one of the five largest cryptocurrencies in the world by market capitalization and is used not only on the Binance exchange but also in the BNB Chain and thousands of projects using this network.

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