Despite heavy outflows, CEXs continue to be pillars of liquidity

Centralized exchanges are the primary gateways for traders to buy and sell crypto. Despite the significant rise in popularity and usage of decentralized exchanges (DEXs) in the past year, CEXs still facilitate most crypto trades. As such, they provide the foundational infrastructure for market liquidity and price discovery.

Understanding their health and performance is important as it provides insights into market sentiment and user behavior. A net increase in inflows shows an increase in trading activity, which, depending on price movements, can indicate both bullish and bearish trends. Conversely, outflows often signal that investors are moving their assets to cold storage, transferring to other platforms, or taking profits. When substantial outflows are paired with declining prices, it can indicate a bearish sentiment or concerns about the security of a particular exchange. However, when outflows come during a period of price stability or increase, it’s seen as a bullish sign. A lack of funds on exchanges leads to a supply crunch that can further increase rising prices.

Monitoring these movements enables us to identify market trends and assess the liquidity and stability of different exchanges. It also allows for detecting unusual activity that could precede market shifts, enabling proactive risk management. Overall, inflows and outflows are critical indicators that reflect the interactions between traders and exchanges, offering a clearer picture of the underlying forces driving the market.

Name Assets Clean Assets 24h Inflows 7d Inflows 1m Inflows Custom range Inflows Spot Volume 24h Open Interest Avg Leverage
Binance $124.457b $104.704b -$145.29m -$909.75m -$1.541b -$6.525b $16.04b $23.279b 0.22x
OKX $23.087b $22.593b $73.03m $132.39m $757.18m $534.94m $2.257b $8.229b 0.36x
Bitfinex $20.85b $16.913b -$26.25m $99.17m $355.63m $355.64m $142.23m $504.06m 0.03x
Robinhood $16.182b $16.182b $44.34m $54.93m -$231.54m -$232.09m
Bybit $9.466b $9.455b -$8.08m $35.88m -$167.6m -$100.55m $3.826b $15.016b 1.59x $7.237b $6.526b -$28.67m -$59.85m -$34.63m $3.46m $977.35m $407.33m 0.06x
HTX $4.178b $4.119b $14.8m -$57.71m -$155.63m -$164.82m $2.42b $1.551b 0.38x
KuCoin $3.207b $2.992b -$18.19m -$52.68m -$156.72m -$158.83m $644.71m $2.334b 0.78x
Bitstamp $3.076b $3.076b $3.86m $17.88m -$66m -$67.7m $235.33m
Deribit $3.412b $3.412b $12.97m -$9.76m -$353.69m -$357.69m $2.612b 0.77x

Data from DeFi Llama showed a significant increase in outflows across all exchanges in the past month, with Binance standing out as the leader. Over the past 30 days, Binance saw $1.541 billion in outflows, significantly higher than Deribit’s second-highest outflow of $353.69 million.

As the largest centralized exchange both by volume and by assets held, Binance’s outflows are bound to be oversized compared to other platforms on the market. However, losing over $1.5 billion in assets has notably impacted the exchange.

Several factors could have contributed to this outflow, the first being the increased regulatory scrutiny the company is facing in various jurisdictions worldwide. Secondly, the exchange’s daily volume suggests that at least some of these outflows could result from users taking profits amid market volatility.

Despite the overall trend being negative, there have been some outliers in the market. Notably, Bitget and OKX stand out with significant positive inflows. Bitget has the highest positive inflow of $1.049 billion, followed by OKX with $757.18 million. The data shows the platforms are attracting significant new deposits compared to their competitors. This may be driven by their reputation for security and focus on professional and high-volume traders. The consistent inflow suggests that Bitget is capturing a significant market share.

Ranked by the total value locked on the platform, Robinhood has also seen significant outflows in the past month. With $231.54 million in crypto outflows over the past 30 days, the exchange’s crypto trading segment may be experiencing competition from more established crypto-focused exchanges.

When it comes to the assets held by these exchanges, Binance leads by a significant margin, with total assets amounting to $124.457 billion and clean assets of $104.704 billion. This substantial difference between Binance and its competitors indicates its dominant market position and extensive user base. OKX and Bitfinex follow but with much lower asset figures. Robinhood also shows a strong presence, emphasizing its role as a notable exchange despite its roots as a stock trading platform.

Clean assets, representing liquid and readily available assets, are exceptionally high for almost all exchanges relative to their total assets, suggesting robust liquidity positions. This liquidity is crucial for maintaining user confidence and operational stability. The only outlier in this liquidity trend is Binance, which holds $19.75 billion less in clean assets.

Spot volume and open interest are critical indicators of trading activity and market engagement on these exchanges. Binance again leads in spot volume and open interest, highlighting its active trading environment. Bybit and OKX also show strong figures, particularly in open interest, indicating a healthy derivatives market and active user participation in futures and other leveraged products. Bitfinex and HTX demonstrate substantial open interest relative to their spot volumes, highlighting their focus on derivative products. This trend is further accentuated by Bybit, which shows the highest average leverage (1.59x), indicating its user base’s propensity for leveraged trading.

With its massive asset base and trading volume, Binance’s dominance continues to shape the centralized exchange landscape. However, its vast outflows show there might be trouble ahead for the exchange. The high open interest and leverage on exchanges like Bybit and Bitfinex highlight the growing importance of derivatives in the crypto market. This trend shows a maturing market where sophisticated trading strategies are becoming more prevalent. High levels of clean assets relative to total assets indicate strong liquidity positions for most exchanges, which are crucial for sustaining operations and user confidence, especially during market volatility.

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