Report on Crypto Exchange Performance: Analyzing CEX and DEX Monthly Statistics!
The cryptocurrency industry is experiencing rapid growth, attracting new users every day. However, this growth presents a crucial decision: where should you buy, sell, and trade your digital assets? The two main options are Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs), each offering unique features and advantages.
This article aims to provide a clear and concise comparison of CEXs and DEXs, cutting through the confusion. We will examine their market share and potential, analyze their strengths and weaknesses, and discuss the factors that are driving the rise of DEXs.
By understanding the nuances of each exchange type, you can make informed decisions about your cryptocurrency journey. So, let’s dive in.
Decentralized Exchanges (DEX) Overview: Analysis of January
In January, DEX exchanges experienced a significant 10% decrease in valuation compared to December, indicating a shift in investor interest and an increase in digital assets outflow. The market’s heightened volatility affected the volumes of inflow and outflow, resulting in a decrease of over 5%. This suggests that investors are more inclined to hold onto their digital assets.
Despite the volatility in crypto prices, the Decentralized Financial (DeFi) system showed growth, rising from $117.54 billion at the beginning of the month to $121.435 billion by January 31, marking a 3.313% Month-on-Month (MoM) increase.
Within the DeFi sector, different subparts displayed mixed sentiments and volatile price actions. Lower cap chains outperformed top chains in monthly gains, with some experiencing returns exceeding 2X in valuation.
DEX Volume Analysis
Entering 2024 with high volatility, the crypto market witnessed significant price fluctuations. Looking at the Month-on-Month (MoM) scenario, DEX volume saw a 13.8596% decrease, dropping from $84.49 billion at the start of the month to $72.78 billion by the end of the month.
Among the top five DEXs, Ocra experienced the highest loss, dropping by 34.081%. PancakeSwap followed with a 16.458% loss, while Uniswap and Maker PSM recorded corrections of 7.746% and 7.14%, respectively. In contrast, Curve maintained stability, posting the least loss at 2.941%. Collectively, other DEXs experienced a 32.023% decline, making it a challenging start to the year.
DEX Share Volume
Despite the decrease in volume, Uniswap secured the highest market share among the top five, increasing from 57.63% to 61.71%, a notable 4.08% increase. Curve also showed resilience with a 0.52% rise, making it one of the two DEXs with a positive month.
On the other hand, Orca recorded the highest correction among the top five exchanges, losing 2.73% in value. Other DEX exchanges recorded a loss of 1.68% Month-on-Month (MoM).
DEX To CEX Spot Trade Volume
The DEX to CEX spot trade volume, which measures the monthly DEX volume divided by the CEX volume, recorded a decline of 0.18%, going from 7.88% to 7.70% by January 31.
DEX Mechanism Volume Share
Understanding the mechanisms within Decentralized Exchanges (DEX) provides valuable insights into the market. The DEX mechanism volume share includes the Constant Product Conservation Function (CP), Hybrid mechanisms combining different approaches, and Central Limit Order Books (OB). Here’s a breakdown of their total volume share.
The Constant Product (CP) subpart saw a rise from 78.21% to 81.5%, marking a substantial 4.206% increase. The Order Book experienced the highest surge, jumping by 14.772%. However, the Hybrid mechanisms faced a downturn, recording a loss of 16.355% during the same period.
Centralized Exchange Overview (CEX)
Centralized exchanges faced significant fluctuations in valuations due to increased price volatility, leading to several major exchanges ending the month in the red. Binance, in particular, experienced a significant fall in the initial month of the year, as it has been under persistent regulatory pressure throughout 2023.
Proof-of-Reserve (PoR)
The current valuation of PoR stands at $71.388 billion, with Bitcoin dominating token allocation at 34.22%. USDT follows with a share of 26.29%, while Ethereum secures the third spot with a slightly above 10% share (10.23%). BNB and AETH hold 4.19% and 2.62% respectively, while other tokens collectively hold 22.46%.
The top five exchange reserves in the industry are dominated by Binance, with an aggregated balance of $27.9 billion, accounting for 39.082% of the total valuation. OKX stands second with a balance of $5.62 billion, followed by Deribit, Crypto.Com, and Bitstamp.
Revenue Insights
Centralized exchanges reported 4 out of 7 green days, 2 out of 7 red days, and 1 neutral day on the daily Profit and Loss (P&L) over the past week. The highest single-day P&L gain occurred on January 29th, contributing to a cumulative P&L of $1.523 billion. However, the crypto industry concluded the month with a red day, recording a loss of $1.649 billion in daily P&L and a cumulative gain of $298.335 million in valuation.
Inflow and Outflow Analysis
The crypto market experienced significant volatility, resulting in substantial fluctuations in the values of major cryptocurrencies. Bitcoin exchange inflow averaged 40,349.290 daily in January, with the highest inflow recorded on January 12th and the lowest on the 21st. Bitcoin exchange outflow averaged 40,389.870 daily, indicating a minor increase in total volume. Similar to the inflow, the highest outflow occurred on January 12th, with the lowest on the 21st.
Exchange Volume Ranking
Among the top cryptocurrency spot exchanges, Binance secured the top spot with a score of 9.9, followed by Coinbase Exchange with a score of 8.4. Kraken, KuCoin, and Bybit rounded out the top five.
Conclusion
Decentralized exchanges (DEX) are still in the early stages, holding roughly 15% of the total market share. The increasing volatility in the industry and changing rules and regulations are driving investors towards DEXs.
Although both exchanges have their pros and cons, it is highly recommended to trade with caution as exchanges are not responsible for any transfers made by the crypto holder.