Bitcoin has shown tremendous resilience this year. Although the overall growth has not been smooth, it is significant as it has come against the backdrop of a banking scandal. This essentially represented a shift in investor sentiment towards viewing Bitcoin as a hedge against a banking crisis.
According to the latest report from the market tracking platform CoinGecko, the spot trading volume on the top 10 cryptocurrency exchanges has reached $2.8 trillion for Q1 2023, which is an increase of over 18 percent from Q4 2022.
Monthly trading volume has also been on the rise from the lowest levels of $0.5 trillion in December 2022, but has yet to reach an average of $1 trillion, a figure last seen in the first half of 2022.
Spot market activity is typically equated with long-term investors, and the increase signals a renewed optimistic outlook on the market.
Regulators around the world have intensified their crackdown on centralized cryptocurrency exchanges (CEX). Market players have turned to decentralized exchanges (DEX), which has spurred significant growth.
As such, DEXs have witnessed their popularity surpass that of CEXs by about twofold. The report estimates that DEXs grew by 33.4 percent, compared to 16.9 percent for CEXs in Q1 2023.
However, the CEX:DEX trading volume ratio remained above 90 percent during the same period.
Binance dominated CEX volume in March 2023, achieving a market share of 62 percent, even as the platform led by CZ faced regulatory hurdles, particularly from the U.S.
On the other hand, the American crypto giant Coinbase has yet to capitalize on the collapse of FTX as its volume fell by 0.5 percent in Q1 2023.
