DEX Volumes Soar Amid US Crackdown: $133B Traded in March
• Decentralized exchanges (DEXs) saw a significant increase in cryptocurrency trading volume in March 2021, with total trading volume reaching $133.1 billion, according to DefiLlama data.
• This spike is likely due to U.S. regulators‘ crackdown on centralized exchanges like Kraken, Coinbase and Binance, as well as the stablecoin crisis that occurred in mid-March.
• This suggests that investors may be shifting towards DEXs for their crypto trading needs.
Increased Trading Volume on Decentralized Exchanges
Decentralized exchanges (DEXs) had most volume in 10 months amid U.S. crackdown in March 2021, with total trading volume reaching $133.1 billion according to DefiLlama data. This was the third straight monthly increase and the highest monthly total since May 2020.
U.S Regulatory Pressure
The surge of activity on DEXs came as the crypto industry faces its strongest regulatory pressure yet from U.S regulators going after centralized exchanges including Kraken, Coinbase and Binance; The SEC went after Kraken for its staking service and issued a Wells Notice to Coinbase while the CFTC accused Binance of evading US law leading some speculators to believe traders would shift towards decentralized exchanges instead for their crypto activities..
Additionally contributing to this rise could be the stablecoin crisis where USDC lost its peg to the dollar following Silicon Valley Bank’s collapse in mid-March; USDC has since resumed its close link to $1 but research platform Kaiko reported CEXs experiencing a serious lack of liquidity which caused an “unprecedented number” of USDC holders rely on DEXs for liquidity during this depeg period..
Shift Towards DEX?
This influx of activity on DEX platforms suggests that investors may be shifting towards them for their crypto trading needs and away from centralized exchanges due to increased regulations and potential risks associated with them..
To sum up, March 2021 saw an unexpectedly high increase in trading activity across decentralized exchange platforms due likely both to regulatory pressure from U.S authorities against centralized exchanges like Kraken, Coinbase and Binance as well as a shift from stablecoin holders needing reliable liquidity during a period of instability caused by Silicon Valley Bank’s collapse in mid-March..