CEX Trading Volumes Double Amid Crypto Market Rebound

Centralized cryptocurrency exchanges (CEXs) have seen their trading volume double over the past five days, rebounding from a yearly low and reaching $37 billion. Despite this significant increase, trading volumes remain below the 12-month high of $105 billion recorded shortly after massive liquidations on October 10.

The monthly figures for August show a similar trend, with trading volume reaching about $490 billion so far, compared to $670 billion in July. However, centralized exchanges face competition from spot cryptocurrency ETFs, which are gaining popularity and giving investors access to a broader range of derivatives and strategies.

Altcoins are driving growth on CEXs, as they offer advantages such as listing new tokens faster and providing infrastructure for smaller-cap assets that ETFs and companies with crypto treasuries cannot replicate. The expansion of decentralized platforms is also putting pressure on centralized exchanges, with DEXs like Hyperliquid and Lighter drawing trading volume away from their centralized counterparts.

The rise in trading activity on cryptocurrency exchanges comes alongside a sharp recovery in Bitcoin, which has climbed above $80,000 and reached around $80,500. The rally began last week, when Bitcoin gained more than 20% in three days, its strongest three-day advance since 2023. A short squeeze that liquidated over $4 billion worth of bearish crypto positions was one of the drivers.