Binance’s (CRYPTO: BNB) spot trading dominance collapsed to 25% in December—its lowest level since January 2021—as offshore rivals Bybit, HTX, and Gate.io absorb volume while on-chain platform Hyperliquid (CRYPTO: HYPE) rewrites how traders access leverage.
Spot Share Down 58% From 2023 Peak
Binance handled close to 60% of all spot crypto trades at its 2023 peak after the FTX collapse.
That number cratered to 25% in December, down from 28.5% in November, according to CoinDesk Data.
The decline marks the exchange’s weakest spot position in four years and signals a structural shift in where crypto’s $3.2 trillion market actually trades.
Spot trading typically accounts for about a quarter of all crypto transactions. The majority happens in derivatives like perpetual futures—and Binance is bleeding there too.
Derivatives Dominance Cut In Half
Binance’s derivatives market share peaked near 70% and now sits at roughly 35%.
The exchange remains the world’s largest centralized platform for both spot and derivatives, but the trajectory points to sustained erosion rather than temporary volatility.
Jacob Joseph, research analyst at CoinDesk Data, says the migration away from Binance looks “less like a temporary swing and more like a broader shift in market structure.”
Offshore Exchanges Win The Volume War
The volume didn’t flow to U.S. platforms like Coinbase Global Inc. (NASDAQ:COIN).
Instead, offshore exchanges captured the displaced activity:
- Bybit absorbed significant spot and derivatives flow
- HTX (formerly Huobi) picked up Asia-Pacific traders
- Gate.io expanded share across perpetuals
U.S. exchanges saw “relatively modest gains” despite improved regulatory clarity under the Trump administration, per Joseph.
The reason: U.S. crypto trading is institution-driven, with deals increasingly happening through OTC desks and off-exchange venues that don’t show up in public volume data.
On-Chain Platforms Eating Derivatives Share
Hyperliquid and other on-chain derivatives platforms are rewriting the competitive landscape.
These blockchain-native exchanges let traders access perpetual futures without centralized custody, KYC friction, or withdrawal limits.
Hyperliquid’s rise demonstrates that crypto-native users prefer trading directly on-chain when the UX matches centralized platforms.
That structural shift threatens Binance’s core business model: capturing volume through low fees and deep liquidity on a centralized order book.
Binance Built Dominance During Crisis—Now It’s Fading
Binance’s market share surged after launching a zero-fees trading campaign in July 2022 following the TerraUSD collapse.
The strategy worked. Volume exploded when FTX imploded in November 2022, cementing Binance’s dominance.
Binance ended the zero-fees promotion in 2023 after spot share hit nearly 60%.
But that competitive moat is eroding as traders migrate to platforms offering better token listings, higher leverage limits, or on-chain execution.
Leadership Shakeup Signals Reset Mode
Binance recently named co-founder Yi He as co-CEO—the biggest leadership shift since Changpeng Zhao stepped down two years ago.
Donald Trump pardoned CZ in October, easing regulatory pressure and potentially clearing the path for Binance to strengthen its separate U.S. operations.
Binance also secured three licenses from Abu Dhabi’s financial regulator, signaling a push into regulated jurisdictions.
But licenses and leadership changes don’t reverse volume flight when traders already found better alternatives.
Image: Shutterstock
