Cryptocurrency Exchanges Show Increase in Spot Trading Volume, with DEX Growing Faster than CEX

04/24/2023 22:55 • Tech Trends • 90 views

According to the latest report by CoinGecko, the spot trading volume of the top 10 cryptocurrency exchanges in the first quarter of 2023 recorded $2.8 trillion, an increase of over 18% compared to the fourth quarter of 2022. Since the low point of $0.5 trillion in December 2022, monthly trading volume has also increased, but has not yet reached an average of $1 trillion. This number last appeared in the first half of 2022. Regulatory agencies around the world have increased their crackdown on CEX. Market participants flocked to DEX, promoting significant growth. Therefore, DEX’s popularity is about twice that of CEX. The report estimates that DEX increased by 33.4% in the first quarter of 2023, while CEX increased by 16.9%. However, the ratio of CEX to DEX trading volume remained above 90% during the same period.

Report: Cryptocurrency spot trading volume reached $2.8 trillion in the first quarter of 2023

As per the newly published report by CoinGecko, the total spot trading volume of the top 10 cryptocurrency exchanges in the first quarter of 2023 has seen a significant rise, reaching USD 2.8 trillion, which marks an 18% growth compared to the fourth quarter of 2022. Despite there being a rise in trading volume, it is still lower than the USD 1 trillion average from the first half of 2022.
With many regulatory agencies worldwide cracking down on Centralized Exchanges (CEX), Market participants have been moving towards Decentralized Exchanges (DEX) resulting in significant growth of the DEX. The report shows that the popularity of DEX is twice that of CEX. While DEX increased by 33.4% in the first quarter of 2023, CEX increased by 16.9%. However, during the same period, the ratio of CEX to DEX trading volume remained above 90%.

The Rise in Cryptocurrency Trading Volume

Despite regulatory crackdowns, the trading volume of cryptocurrency has seen a significant rise. The first quarter of 2023 has witnessed a trading volume of USD 2.8 trillion by the top 10 cryptocurrency exchanges, marking a steep incline of 18% when compared to Q4 2022.
With monthly trading volumes steadily increasing since December 2022’s low point of USD 0.5 trillion, the market has not yet reached the average trading volume of USD 1 trillion in the first half of 2022.

The Popularity of DEX

As regulatory agencies worldwide continue to crack down on CEX, market participants have shifted their focus towards DEX, which has gained significant popularity. The report suggests that DEX has grown by 33.4% during the first quarter of 2023, while CEX has grown by 16.9%.
The popularity of DEX has been due to its decentralized nature, which provides users with more control over their assets and a more secure platform. As a result, DEX has seen growth two times faster than that of CEX.

CEX vs DEX Trading Volumes

Although the DEX has witnessed immense growth, the ratio of CEX to DEX trading volume remained above 90% during the first quarter of 2023. CEX continues to be a significant marketplace, but the growth rate of CEX is slower than that of DEX.

Regulatory Crackdowns on CEX

Regulatory crackdowns on CEX have been a primary contributor to the rise of DEX. Several regulatory agencies worldwide have shown continuous interest in regulating the cryptocurrency market, as it is viewed as a potential risk to the global financial system.
Regulators have raised concerns about market manipulation, fraud, and other illegal activities conducted on CEX platforms. On the other hand, DEX provides a more secure platform for traders, which is why it has grown considerably in popularity.

Conclusion

The cryptocurrency market has seen significant growth in trading volume during the first quarter of 2023. While CEX remains a significant marketplace, DEX has garnered twice the popularity due to its decentralized nature. Regulatory agencies worldwide’s crackdown on CEX has resulted in market participants flocking to DEX, promoting significant growth.

FAQs

1. What does the high growth rate of DEX indicate?

The high growth rate of DEX indicates an increased need for a more secure and decentralized platform for cryptocurrency trading.

2. Does regulatory crackdown on CEX affect the value of cryptocurrency?

There is no evidence to suggest that regulatory crackdowns on CEX have affected the value of cryptocurrency.

3. Why is DEX considered more secure than CEX?

DEX is considered more secure than CEX because it provides users with more control over their assets and is not vulnerable to targeted hacks or cyber threats.

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