American crypto exchange Coinbase appears to be losing traction in global trading volume amid fierce competition sparked by the launch of spot Bitcoin ETFs in the U.S.

According to data compiled by blockchain analytics firm Kaiko, Coinbase is no longer the second-largest brand in terms of global trading volume. Since October 2023, Coinbase has seen its market share drop from 11% to 8%, while rival Bybit now accounts for about 16% of global trading volume.

Kaiko notes that Bybit’s efforts to capture trading volumes by lowering its trading fees have translated into market share growth. Lower costs were not the only reason for its rise; the exchange also benefited from Binance’s regulatory troubles.

“Analyzing spot trade volumes by asset reveals that the increase in volume on Bybit has been driven by both BTC and ETH, whose market share has risen from 17% to 53% since last year,” analysts at Kaiko say.

For comparison, Binance has seen a stronger increase in altcoin volume. Although Binance still holds the first place in terms of market share at 54%, its share of Bitcoin and Ethereum originated volume has declined to 43% this year from 59% a year ago. Kaiko suggests this change might be driven by swings in risk sentiment, which tend to decline more during bear markets.

Despite Bybit’s progress, Wall Street seems to be distancing itself from the exchange. In late May, reports emerged that Citadel Securities-backed prime brokerage firm Hidden Road stopped offering its clients access to Bybit due to a disagreement over the exchange’s KYC/AML procedures. Bybit has not publicly addressed the matter, but a spokesperson for the exchange said the platform is committed to transparency and will provide further updates as the review progresses.

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