DEX Market Share Surpasses 19.5% in July: A Cold Winter for CEX Spot Trading Beneath the Surface

"Is it the denominator effect or a shift in pricing power?

Written by: Gino Matos

Compiled by: Saoirse, Foresight News

In July, the spot trading volume of centralized cryptocurrency exchanges fell by 31.2%, dropping to $727 billion, marking the lowest monthly level since October 2023. Decentralized exchanges also saw a decline in trading volume, but the drop was only 9.82%, with a trading scale of $176 billion.

This significant gap in scale has pushed the spot trading share of decentralized exchanges to a historic record of 19.5%.

The Areas Where Centralized Exchange Trading Volume Plummeted

Public statistics show that in July, the rankings of cryptocurrency trading platforms indicated that the leading centralized exchanges experienced a 35.5% month-on-month decline in spot trading volume, while perpetual contract trading volume saw a relatively smaller drop of 19.6%.

This data suggests that spot trading is the weakest sector in centralized cryptocurrency trading, while demand for leveraged trading remains relatively strong. The same dataset also shows that website visits to leading centralized exchanges increased by 3.0%, but app downloads fell by 2.1%, reflecting a cautious overall market sentiment.

Robinhood reported a total cryptocurrency trading volume of $18 billion in the second quarter, a year-on-year decrease of 35%. However, the nominal trading volume for stocks on the same platform surged by 85%, and options trading volume also rose by 50%.

Coinbase stated that in the same quarter, the cryptocurrency spot trading volume for individual users fell by 38% year-on-year, while derivatives and prediction market businesses somewhat offset the downturn in spot trading.

According to calculations by TRM Labs, the global cryptocurrency trading volume aimed at ordinary retail investors decreased by 11% year-on-year in the first quarter of this year, down to $979 billion, marking two consecutive quarters of contraction.

These signs indicate a cooling of retail market trading enthusiasm, but behind the phenomenon of retail investors withdrawing from centralized platforms, there are three complex realities: Coinbase itself mentioned that the decline in personal spot business was partially offset by derivatives and prediction markets. This means that traders leaving the centralized spot market have many other options besides turning to DEX.

An academic study from 2025 reported that between August 2023 and March 2025, there were a total of 7.2 million arbitrage trades between centralized and decentralized exchanges on the Ethereum chain, with 19 major arbitrage bots profiting approximately $233.8 million, of which three arbitrage entities took about 75% of the total profits and trading volume.

There are indeed ordinary retail trades on-chain, particularly concentrated on the Solana public chain and new token issuance platforms. However, the Galaxy Digital Research Institute pointed out that Solana's fee income heavily relies on speculative trading by retail investors, which is deeply intertwined with dedicated automated market makers and execution bots.

Relying on public on-chain data, it is difficult to distinguish whether a trade comes from a real retail wallet or from a trading bot routed through the same liquidity pool.

Price Discovery in Cryptocurrency is Diverging with Asset Types

The resilience of DEX trading volume is largely supported by professional traders and algorithmic systems.

DefiLlama statistics show that the DEX aggregator's cumulative trading volume over thirty days reached $73.2 billion, with leading platforms including Jupiter, OKX DEX, 0x, DFlow, KyberSwap, and LiquidMesh. The positioning of these infrastructures is to efficiently handle large orders, and their business volume is far beyond what ordinary users can support through simple token exchanges.

From the perspective of public chains, in July, Solana's on-chain trading volume was approximately $49.5 billion, surpassing BNB chain, Ethereum, and Base chain. Stablecoin trading pairs alone contributed $31.5 billion in transaction volume, close to 30% of DEX's total trading volume for the month.

The extent to which trading platforms control pricing power largely depends on the types of crypto assets. Multiple comparative studies on Binance and Uniswap indicate that centralized exchanges still dominate price discovery for Ethereum, especially during periods of significant market volatility in 2024.

A paper published in the 2026 Financial Research Review proposed that trading orders on DEX willing to pay high priority fees contain strong market information. Traders with information are willing to continuously pay higher fees to ensure their trades are executed first.

Another study published in Management Science the same year found that the larger the trading amount, the stronger the execution competitiveness of DEX. The negative impact of gas fee costs on small transactions is much higher than that on large transactions, thus creating a clear market stratification phenomenon.

Bitcoin's price discovery relies almost entirely on centralized exchanges, ETF products, and the CME futures market. The liquidity of native Bitcoin within DEX is negligible in the global cryptocurrency trading landscape.

The prices of mainstream trading pairs for Ethereum also follow centralized platforms. However, the situation for long-tail altcoins, new tokens from the Solana ecosystem, and meme coins is entirely different, as many of these assets have not yet landed on centralized exchanges but are already being traded on-chain.

Market makers used to only need to monitor the order books of centralized exchanges; now they must also incorporate on-chain liquidity pool depth, aggregator routing conditions, and on-chain priority fee levels into their market signal systems.

As gas costs are diluted by large transactions, trading desks executing large orders will increasingly choose on-chain routing. As the liquidity of centralized exchanges thins, the value of cross-platform arbitrage opportunities increases, but arbitrage profits quickly concentrate among a few players with strong overall capabilities.

Where Will the Share Data Shift Next?

Optimistic Scenario: DEX aggregators, Solana, Base ecosystem, and large on-chain trading execution capabilities continue to iterate, and the share of DEX in total spot trading volume is expected to reach 22%-25%. In this scenario, aside from long-tail tokens, more assets will prioritize on-chain price formation; on-chain orders paying high priority fees will transition from niche academic indicators to widely referenced leading market signals for traders.

Pessimistic Scenario: If Bitcoin or Ethereum experiences a genuine market rebound, the recovery speed of centralized spot trading volume will outpace that of DEX. Historical experience shows that when risk appetite warms up, retail investors often return to centralized trading software first.

Following the pessimistic path, even if DEX's own trading volume does not plummet, the market share will revert to 14%-16%. The high share in July was merely a denominator effect caused by the short-term contraction of the overall market, and a monthly market recovery would be sufficient to erase this phenomenon.

The record high share of DEX only indicates that the contraction speed of centralized cryptocurrency spot trading in July was faster than that of on-chain trading, but this does not prove that market prices have already been generated on-chain. Bitcoin, Ethereum, and those long-tail tokens that trade on-chain before listing on exchanges each have different pricing logic.

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