Crypto exchange volumes double in five days as market activity rebounds

Exchange volume has doubled in just five days last week, jumping off the yearly low and now trading through $37 billion. While it may feel like a doubling in volume is super impressive, it's still a far cry from the 12-month high of $105 billion set shortly after the 10/10 liquidations.

Monthly volume tells a similar story, with $490 billion traded so far in August compared to $670 billion in July. Worth remembering, spot CEX volume now has to share with spot ETFs this cycle, whereas previously all demand would be funneled through a CEX.

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The rise of crypto ETFs and digital asset treasuries may prove to be a headwind to CEX volume. The TradFi instruments allow for more derivatives and optionality while plugging directly into existing TradFi rails and infrastructure.

However, demand for most altcoins will keep flowing to CEXs. Listing speed, trading pair depth, and tooling for smaller-cap tokens are advantages that ETF and DAT structures can't replicate. Bitcoin and Ethereum gained over 23% and 30% last week, in what was arguably one of the most violent price moves from bulls in over a year. The altcoin market, represented by the total crypto market cap excluding BTC and ETH, rose by ~13% in the same period.

A third force is pulling from CEX volumes this cycle. The sharp rise in adoption of decentralized exchange options like Hyperliquid and Lighter may also start pulling volume away from their centralized counterparts. If markets continue to grow at their current rate, all instruments will benefit from the arms race to accumulate tokens.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.