Crypto shifts to decentralization

The 2022 downturn of FTX and several other cryptocurrency exchanges took many alternative investors by surprise, prompting them to re-evaluate the reliability of cryptocurrency service providers. Over the past year, we have observed a shift in trading volume from centralized crypto exchanges (CEX) like Binance towards decentralized exchanges. Fundamentally, decentralized exchanges (DEX) eliminate the need for intermediaries, allowing buyers and sellers to directly trade any digital asset. This could facilitate a more trustworthy environment that is less prone to manipulation. Despite the recent shakeup, the interest in digital assets among alternative investors remains robust, with the crypto industry transitioning towards a more sustainable future. However, the growing acceptance and relentless evolution of the crypto landscape raises an intriguing question: are decentralized exchanges a lasting innovation or merely a stepping stone to another development?

Source: TheBlock, Robeco analysis, June 2023.