It is not entirely surprising to see the overall trading volume on centralized exchanges decrease further. This trend has been rather apparent since last month. Interestingly enough, the past month hasn’t been too great for DEXes either.
Centralized Exchanges Lose Traction
When the value of Bitcoin rises for several weeks in a row, interesting things are bound to happen. Whereas the logical outcome is an increase in trading volume, the opposite can come true as well. Looking at the recent volume for centralized exchanges, things have evolved in an unexpected direction.
Since last month, the volume on centralized exchanges continues to decline. This comes after a dip to $164.1 billion in June of 2020. It then quickly rose to $369 billion in August 2020. Fluctuations are synonymous with cryptocurrencies, including the trading platforms. The ongoing growth of decentralized platforms may have something to do with these developments.
As the statistics above indicate, the decrease in volume affects all centralized exchanges. Binance remains the top platform, even during trends like this one. Huobi has also solidified its position in the market as of late. OKEx is the clear third dog in the fight, well ahead of Coinbase, Kraken, and Bithumb. There is still room for a lot more competition, given these numbers.
The bigger question is why the volume on centralized exchanges keeps decreasing. Going from $369 billion to $214.1 billion in 2 months is a big difference. Something will have to change in the near future for these platforms. What that change will need to entail exactly, remains to be determined. More and more people seem to steer away from centralized platforms as of late. That in itself is a very remarkable trend to keep an eye on.
DEXes Note a Similar Trend
Looking at the recent volume for decentralized exchanges, a very similar trend becomes apparent. More specifically, DEXes note a 30-day decrease in volume of 16% as well. This is less steep than the centralized exchanges, but that is only normal. DEXes have far less overall trading volume on average, thus any big change will be less outspoken.
That being said, it will be interesting to see how this correlation plays out. If centralized exchanges continue to see less volume, traders are bound to go somewhere else eventually. Whether that will will involve DEXes, or something else entirely, has yet to be determined. Despite this decline across the board, the overall interest in cryptocurrencies doesn’t seem to be decreasing just yet.