Smaller exchanges are gaining ground as Coinbase’s market share dips, according to Kaiko

Coinbase has experienced a notable decline in market share, while smaller exchanges have shown growth in recent months, as per a September 9 report from research firm Kaiko.

Initially dominating over half of the US crypto market share earlier this year, Coinbase’s market share has now dropped to 41% in early September, down from 53% in June.

Bullish has been the biggest gainer, with its market share nearly doubling from 17% to 33% over the same period. Unlike Coinbase, Bullish caters more to institutional clients rather than retail investors.

Established in 2021 as a subsidiary of blockchain firm Block.one and backed by PayPal co-founder Peter Thiel, Bullish made headlines recently with its acquisition of crypto-focused media outlet Coindesk.

Top 3 Exchanges Dominance

The top three US exchanges have significantly increased their market share since 2021, controlling nearly 90% of the market, up from 66% in April 2021, as per Kaiko’s data.

In contrast, smaller exchanges have seen their share decrease from 34% to 11% due to factors like stricter regulations and reduced trading activities during the 2022-2023 bear market.

This decline can also be linked to the collapse of FTX in 2022 and regulatory actions against Binance.US, impacting their market share.

Stock Performance Analysis

Coinbase’s diminishing market share coincides with a positive stock upgrade from British bank Barclays for COIN from underweight to equal weight.

The bank analyst highlighted Coinbase’s growth in product offerings and improved economic outlook, expecting the exchange to benefit from favorable regulatory changes.

Although uncertainties persist, including regulatory challenges and an ongoing SEC lawsuit, Coinbase’s stock has shown a 5% increase in early trading today, but its year-to-date performance is down by 10%.

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