A look at Dubai-based Bybit, whose co-founder says it became the world's second largest crypto exchange by trading volume partly by serving former FTX users
Ryan Weeks / Bloomberg :
Context & Ripple Effects
Bybit’s rise follows the collapse of a major rival whose earlier scale was underscored by FTX’s $900M fundraising and high trading volumes. The exchange’s co-founder identifies former FTX users as one contributor to Bybit’s expansion.
The profile also lands just after data provider Kaiko attributed a jump in Bybit’s share partly to the US spot-bitcoin ETF launch, putting user migration alongside a broader increase in crypto trading activity. Dubai remains a consequential backdrop: FTX’s failure had already raised concerns about the UAE’s rapid crypto push.
First-order effects
- Bybit gains validation and visibility as a leading venue for traders displaced by FTX, strengthening its position against other large exchanges for liquidity and active accounts.
- Former FTX customers have another established destination for trading, concentrating more post-FTX activity at surviving exchanges such as Bybit.
Second-order effects
- Rivals, including Coinbase and other global exchanges, face greater pressure to compete for trader liquidity and product breadth as Bybit’s market share grows.
- Dubai’s crypto sector gets a prominent exchange-growth case, while the FTX precedent keeps the credibility and oversight of locally based platforms in focus.
Third-order effects
- The episode points to post-failure consolidation in crypto trading: trust shocks can rapidly reallocate users and liquidity toward a smaller set of perceived viable venues.
- If exchanges continue to broaden beyond trading, the divide between crypto platforms and financial-service providers may narrow—but whether that improves confidence depends on governance and regulatory credibility.
The trend: Crypto-market failures and demand surges are accelerating the concentration of trading liquidity among a few global exchanges, while increasing scrutiny of their legitimacy.