November 6, 2023

The 2023 CEX Market Report

The 2023 CEX Market Report from the 0xScope team evaluates major shifts in the market shares of various centralized exchanges (CEXs) over the past year. This report captures data from several major exchanges* from October 17, 2022, to October 17, 2023.


Here are the emerging trends in the CEX landscape over the past year:

1. Binance's lead shrinks. Binance still holds the top position among centralized exchanges, with its key data indicators accounting for around 50% or more of the entire market. However, its dominant position has weakened in the past year, especially in the last three months, with a continuous decrease in trading volume and other indicators estimated to be around 10% lower overall.

2. OKX emerges as solid No. 2. Among other exchanges, OKX has been steadily growing and has secured its position as the second-largest exchange for spot and derivative trading. Bybit, Bitget, and MEXC closely follow as the second tier of exchanges. Huobi, which has gradually fallen behind, forms the third tier along with Kucoin, Gate, and others.

3. Smaller exchanges give stiffer spot competition. Regarding spot trading, Binance faces challenges not only from traditional competitors like OKX and Coinbase but also from Upbit, which has gained a market share of nearly 15% in the past three months due to the relatively prosperous South Korean market. Additionally, exchanges like Bybit, Bitget, and MEXC have taken away a portion of the trading volume through their active listing strategies.

4. Binance tops derivatives trading as rivalries heat up. Regarding derivatives trading, the impact on Binance is currently not apparent (50% -> 45%), but its main competitors have gradually increased their market shares over the past year.

Other data indicators also align with the trading volume trends mentioned above. Although Binance still holds at least half of the market share, its percentage has consistently declined over the past year, while the shares of second-tier exchanges and new challengers like Upbit are rising.

Market Volume

Binance still accounts for over half (51.2%) of crypto trading volumes among CEXs. OKX, Bybit, Bitget, and MEXC make up the second tier of exchanges with major market share. Please note that we excluded Coinbase, Upbit, and other major exchanges from certain charts that discuss derivatives trading, due to these exchanges' lack of derivatives products.

In October 2022, Binance held a dominant market share of 54.6%, but this proportion steadily declined over the following year and stayed around 45% after July 2023. Despite still being in the lead, Binance saw its gap shrink against main competitors, such as OKX and other second-tier exchanges.

OKX closely followed Binance and ranked second among all exchanges, accounting for 16.1% of total trading volume in the latest week (week of October 17, 2023), compared to 10.5% a year ago. Bybit, Bitget, MEXC, and other exchanges followed closely behind and maintained healthy growth trends in the past year.

Spot Trading

Binance's spot trading volume is relatively larger, but not significantly so, at 52.5% of the total market share. South Korean exchange Upbit and global platform Coinbase rank second and third, respectively, showing their advantages in spot trading. OKX and MEXC complete the list of spot exchanges with more than 5% market share, with the rest of the exchanges getting 3.2% or lower.

Binance's spot trading volume has seen a significant decline in the past year, perhaps due to its listing strategy. Most popular coins experienced a downturn immediately after being listed on Binance. A year ago, Binance's spot trading volume accounted for 62% at the start of the covered period for the report, but in the past month, it has dropped to around 40%.

Upbit's performance in the spot trading field is remarkable, with its data consistently above 10% in the past month. During the latest week included in this report, Upbit reached 15.3%, a significant increase from its 5% share last year.

Coinbase's market share has remained relatively stable throughout the year, ranging from 5% to 7%. Meanwhile, Bybit saw its spot volume share grow from the 2%-4% range last year to the 6%-7.5% range during the most recent weeks.

For most of 2023, other exchanges generally retained market shares of less than 5%, except for OKX and Huobi. OKX's weekly market share fluctuates from 5% to 7% during most weeks, while Huobi had a 12-week stretch during the third quarter of 2023 when it captured between 6% and 10% of the market share.

Derivatives Trading

Binance's trading volume share in derivatives (50.9%) is slightly lower than the overall volume share, but the difference is not significant. Major exchanges OKX, Bybit, Bitget, and MEXC form the second tier of derivatives exchanges, just below Binance with a combined market share of 42.3%.

Binance's derivatives market share has been relatively stable, staying at around 50% in the past year, but it has recently decreased to about 45%. Meanwhile, OKX's share of derivatives trading has steadily increased in the past year, rising from 10% last year to about 15% currently.

The second-tier players in derivatives trading are OKX, Bybit, Bitget, and MEXC. They also compose the second-tier players in terms of total trading volume, indicating that derivatives trading dominates the overall trading volume.

On-Chain Data (Asset Values, Deposit Addresses)

The top five exchanges in the CEX assets value table** below (Binance, Coinbase, Bitfinex, OKX, Kraken) account for over 80% of the total market exchange funds, and well-established exchanges have certain advantages in this regard.

There is a low correlation between the exchange's amount of funds and its trading volume ranking. Bitfinex, Coinbase, and Kraken have all entered the top five in terms of funds, but their overall trading volume rankings are not high. Factors that explain this include Bitfinex's unique relationship with Tether, as well as the lack of derivatives trading on Coinbase and Kraken.

Binance still dominates other exchanges regarding asset values, but its market share has declined by about 5% in the past year (50%->45%). The lost share may have been taken by OKX and Coinbase, two of Binance's main competitors, as both exchanges have seen an increase in their share of funds in the past year.

The number of deposit addresses of an exchange can indirectly reflect the number of users on the exchange, but the statistics of deposit addresses are limited by the different deposit and withdrawal rules of each exchange and the generation limits of deposit addresses. Moreover, the openness of the exchange's wallet also affects the accuracy and validity of the data, so the chart below should be taken as a reference only.

Binance and Coinbase have a nearly equal number of deposit addresses, totaling more than 60% of the entire CEX market. This is related to the length of time that these two exchanges have been prominent in the market.

We now turn our attention to active deposit addresses on CEXs. Coinbase has a large number of deposit addresses, but its active address count is relatively low, indicating that many historical deposit addresses are no longer being used.

Meanwhile, OKX and Binance have similar levels of activity in terms of deposit addresses, suggesting that the two exchanges may have a relatively similar number of active users.

Meanwhile, the monthly numbers of newly added deposit addresses for Binance and Coinbase continue to decline, to some extent reflecting the relative weakness of the two exchanges in acquiring new customers due to their respective sizes.

OKX has seen a rapid increase in the number of newly added deposit addresses since 2023, possibly related to its functionality of generating multiple deposit addresses for each account.

Website and Social Data

While data on website traffic and social media followers have little to no correlation to an exchange's actual performance, the 0xScope team included these data points for reference on related trends. Please note that website traffic numbers are based on rough estimates from multiple sources, while social media data is reasonably susceptible to manipulation, like bot followers and other tactics.

Nonetheless, website traffic trends point towards a slow and steady decline at Binance over the past six months, with other exchanges recording small gains in this regard.

Roughly speaking, judging from the proportion of Twitter followers, Binance is still on a downward trend, although its number of followers is still increasing. Binance's share of followers compared to the rest of the CEX industry has dropped from 45% to around 40%. Meanwhile, OKX has grown rapidly in the past year, with the number of Twitter followers nearly tripling.

* Major exchanges are included in this report, while exchanges whose data authenticity is difficult to discern are excluded, even though their data is impactful.

** Although the 0xScope team has made every effort to collect complete information on exchange addresses, there may still be a notable margin of error due to the lack of transparency in the exchanges' on-chain addresses.

Disclosure: 0xScope received an investment from OKX Ventures and collaborated with Bitget on the Bitget Smart Awards.

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