In addition to macroeconomic factors, the successes and failures of market participants affect interest in cryptocurrencies. During the 2020 bull run, investments were pouring in, with crypto exchanges accounting for between 45% and 60% of total transactions. In contrast, monetary tightening has led to an outflow of funds from risky assets, and a series of collapses in 2022 undermined confidence in centralised participants.

The indicator reached its local bottom of 33% in October, just before FTX collapsed. Since then, crypto exchanges' share of total flows is showing confident growth at a whopping 54%.

When looking at flows in terms of participants, we see that whales have been significantly increasing their activity lately. Their current share makes up 17.9% (purple). Meanwhile, inter-exchange flows fell to 5.1%.

While we're on the topic of the return of crypto exchanges' dominance, their reserves or the volume of client deposits are also worth mentioning. Storage in cold wallets is gaining traction, overall. While cryptocurrency exchanges accumulated 3.20 million BTC at its peak, their reserves now stand at 2.26 million BTC.

FTX's collapse did play a role, as did the emergence of decentralised platforms. But Coinbase's significant share decline and loss of leadership happened because of the repressive approach of US regulators. Binance, on the other hand, experienced the same difficulties, but still managed to attract additional revenue due to its wide geographical reach

We recently covered spot trading being at a three-year low, But the growing participation of crypto exchanges indicates a renewed interest in crypto trading and a return of confidence in centralised market participants. 

StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)