Coinbase market share falls to 5.8% amid rising DeFi competition

Coinbase’s market share dropped to 5.8% in July 2025, despite a surge in trading volume to $101.7 billion, according to CoinGecko data [1]. This decline highlights intensifying competition in the digital asset trading sector, with Binance reportedly maintaining 40% of global trading volume, and MEXC experiencing a notable rise in market presence [1]. The U.S.-based exchange, once a dominant player, now ranks ninth globally in terms of market share [1].

The drop in market dominance reflects a broader industry trend of shifting user preferences toward decentralized finance (DeFi) and onchain protocols [1]. Coinbase CEO Brian Armstrong has acknowledged these changes, emphasizing the need for regulatory clarity to support the mainstream adoption of stablecoins and the growing competition from decentralized platforms [1]. The company's product head, Max Branzburg, has echoed this, noting the increasing shift toward onchain finance and the importance of adapting to user demand [2].

Coinbase’s onchain lending has grown to $600 million, signaling increased adoption of DeFi solutions [2]. This aligns with the company's strategic focus on expanding decentralized financial products, including a new borrowing feature that allows users to access liquidity without selling their crypto holdings [2]. However, the platform’s trading volume has experienced a 27.7% annual decline, reflecting a broader trend of shrinking volumes across the top ten exchanges [2].

Financial performance has also been affected, with Coinbase reporting a drop in quarterly profit due to declining trading revenue, despite an increase in subscription and service income [4]. The company’s stock price has been under pressure, with COIN shares trading lower amid investor sentiment influenced by profit-taking and market volatility [5].

The decline in market share is part of a broader trend across the industry. In Q2, seven of the top ten exchanges recorded a drop in trading activity, with Crypto.com experiencing a 61% decline in volume from Q1 to Q2 [2]. The combined volume loss for the top ten exchanges totaled $1.5 trillion, a 27.7% year-over-year decrease [2].

Despite these challenges, Coinbase continues to expand its services, including the $2.9 billion acquisition of Deribit to strengthen its position as an "everything exchange" [2]. The platform has also added support for decentralized trading of Base tokens and is planning to introduce Solana support, further aligning with the DeFi ecosystem [2].

The juxtaposition of declining trading dominance and growing onchain lending illustrates Coinbase’s strategic pivot toward decentralized financial solutions. As DeFi adoption continues to rise, Coinbase’s regulatory compliance and institutional-grade infrastructure could position it as a key player in the evolving blockchain-based financial landscape [2].

Source:

[1] https://cryptopotato.com/coinbase-is-losing-its-grip-market-share-drops-despite-massive-volume-surge/

[2] https://coindoo.com/coinbase-expands-onchain-lending-past-600m-amid-global-market-share-drop/

[3] https://www.ainvest.com/news/coinbase-global-short-interest-declines-crypto-surge-2508/

[4] https://www.aol.com/news/coinbase-reports-rise-quarterly-profit-201217636.html

[5] https://www.marketbeat.com/stocks/NASDAQ/COIN/news/