Coinbase, a cryptocurrency exchange, has been overtaken by Bybit in terms of trading volume since October, as reported by analytics firm Kaiko. According to a recent analysis, Kaiko claims that Bybit has been able to gain a significant advantage in the market due to the introduction of Bitcoin (BTC) exchange-traded funds (ETFs) in the United States.

The report states that the launch of spot Bitcoin ETFs in the US has led to a substantial increase in global crypto trading volumes, benefiting some exchanges more than others. Bybit has seen the most significant growth, with its market share doubling from 8% to 16% since October, surpassing Coinbase in March to become the second-largest exchange after Binance. On the other hand, despite reporting improved revenue and profits, Coinbase’s global market share has only seen a marginal increase of 1% over the same period.

Kaiko also suggests that Bybit’s competitive edge may be attributed to its low fees. However, it acknowledges that other offshore exchanges like Binance and OKX also offer low fees, and many exchanges have ongoing zero-fee promotions and reward campaigns. Bybit’s introduction of zero fees for USDC trading in February 2023, as well as Binance’s promotions of TUSD and FDUSD, indicate that while low fees contribute to Bybit’s success, they are not the sole reason for its rise.

The analysis from Kaiko further highlights the role of Bitcoin and Ethereum (ETH) trading in driving Bybit’s growth, as the exchange’s market share of these leading digital assets has increased from 17% to 53% over the past 12 months. Bybit’s expansion in the spot market has also been supported by its rapidly growing derivatives offering, solidifying its position as the second-largest derivative market after Binance in 2023.

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