- Centralized crypto exchanges are seeing a decline in Bitcoin inflow
- At the same time, Ether deposits have been growing on CEXes
- The who activity has been related to the trends in the DeFi market
The attention of Bitcoin investors seems to have been shifted to decentralized exchanges (DEXes) amid the fuss in the DeFi market. Consequently, centralized crypto exchanges (CEXes) are reportedly seeing a huge decline in the number of active cryptocurrency investors who deposit Bitcoins. However, the number of active Ether users has been growing on the exchanges.
CEXes record less active Bitcoin users
Recently, the number of active investors who deposit Bitcoins to centralized crypto exchanges weekly reached a three-year low. This was shared by CryptoQuant, an on-chain analytics platform. The metrics account for all CEXes, including BitMEX, Huobi, Bithumb, Bitfinex, Gemini, Bittrex, OKEx, Kraken, and Binance, which holds most of the traffic amongst other exchanges.
One can easily predict that the decline relates to the high-yielding trends in the DeFi market. Rather than keeping their coins on CEXes, Bitcoin users arguably prefer locking them in DeFi protocols for better returns. This is evident with the number of growing synthetic Bitcoins, i.e., Bitcoins tokenized on Ethereum for use in DeFi.
DeFi effect on centralized crypto exchanges
While weekly Bitcoin active users dropped across CEXes, Ether sees an opposing result at the same time. The crypto exchanges are seeing more weekly inflow of Ethereum coins from users. This signals a continuous growth in the Ethereum space amid the rush in decentralized finance.
The number of ETH weekly active users is increasing, and I think there’s more if we can aggregate DEX users. Ethereum space is growing with #Defi.
Ki-Young Ju, CryptoQuant CEO
Notably, a significant amount of Ether has been locked in the DeFi protocol than in crypto exchanges, as Glassnode revealed. Most DEXes are even seeing more trading activity than CEXes. As Messari recently noted, decentralized exchanges garnered almost $12 billion worth of trading volume over the past month.
