The adoption and valuation of cryptocurrencies have seen consistent growth over recent years, drawing heightened attention from institutional investors and fueling broader market momentum. This expansion has naturally propelled the businesses operating within the crypto ecosystem—particularly exchanges—into a phase of significant development.
Below, we examine key trends, sector-specific growth patterns, and evolving user preferences that defined the competitive dynamics among crypto exchanges throughout 2021.
Monthly Cryptocurrency Value Received by Exchanges
While month-over-month growth hasn't been uniform, the overall trajectory of value flowing into exchanges has been upward. However, the number of active exchanges has not followed the same path. After reaching a peak of 845 in August 2020, the number of active exchanges declined to 672 by August 2021.
This suggests a phase of industry consolidation, where stronger platforms thrive while smaller ones struggle to retain market share.
Exchange Categories by Business Model
To better understand which types of exchanges are growing, we can categorize them based on their operational structure and technical infrastructure:
- Centralized Exchanges (CEX)
- Decentralized Exchanges (DEX)
- High-Risk Exchanges (minimal KYC requirements)
- OTC Brokers
- Derivatives Exchanges
Since 2019, the number of active DEXs and OTC brokers has risen substantially. Derivatives exchanges also saw modest growth. In contrast, the number of CEXs and high-risk exchanges declined slightly after an initial increase.
Segmenting by Exchange Size
We can further refine this analysis by introducing a size-based classification:
- Small exchanges: Received less than $10M in cryptocurrency value between August 2020 and August 2021.
- Large exchanges: Received $10M or more during the same period.
Additionally, centralized exchanges can be classified into:
- C2C (Crypto-to-Crypto): Facilitate trades between cryptocurrencies.
- C2F (Crypto-to-Fiat): Allow users to exchange fiat currency for crypto, serving as an essential gateway.
When combining business model and size, clear trends emerge:
Large DEXs, large high-risk exchanges, and large hybrid platforms saw the most growth—each category more than tripled in count. Large OTC brokers, large C2F exchanges, and derivatives platforms also experienced moderate growth.
On the other hand, most small exchanges—across nearly all business models—declined in number.
Value Received by Market Segment
Beyond the number of exchanges, it's essential to evaluate growth based on the value of transactions received.
Most service types saw significant increases in received value, though a notable dip occurred between May and June 2021—likely influenced by China's crackdown on cryptocurrency mining.
Between August 2020 and August 2021:
- Large DEXs saw substantial transaction growth.
- Large OTC brokers and large CEXs also expanded.
- Derivatives exchanges led all categories with a 686% increase in value.
- Nearly all small exchange types received less cryptocurrency.
The clear takeaway: decentralized exchanges are gaining significant traction, mirroring the explosive growth of the broader DeFi ecosystem.
The Rise of Decentralized Exchanges (DEX)
The value received by DEXs grew from just over $10 billion in July 2020 to a peak of $368 billion in May 2021. By September 2021, the figure stood at nearly $143 billion.
While centralized services also grew, DeFi activity occasionally surpassed them in certain months.
Transaction Sizes: DEX vs. CEX
DEX transactions are typically larger than those on centralized platforms. In August 2021:
- The average DEX transaction exceeded $26,000 in crypto value, compared to around $12,000 for CEX.
- The median DEX transaction was just over $900, while CEX median transactions were approximately $150.
This discrepancy can be attributed to DeFi’s popularity in wealthier nations with more mature crypto markets. As David Gogel, Growth Lead at dYdX, noted:
"Most DeFi users are seasoned crypto investors or traders looking for new sources of alpha."
Larger transaction sizes make sense given that DEX users often deploy significant capital, either for themselves or on behalf of others.
Derivatives exchanges also reflect this trend, with average and median trade sizes exceeding those of standard CEXs.
The Role of Exchange Size and Asset Diversity
Larger exchanges are growing faster and surviving longer than their smaller counterparts. In fact, large exchanges were the only group that grew across all categories from 2019 onward.
One reason may be that new users are more likely to gravitate toward well-known platforms with higher liquidity. Another critical factor is the number of unique crypto assets an exchange supports.
Data shows that exchanges offering more unique assets generally achieve higher transaction volumes. While some platforms with fewer assets still perform well, diversity clearly correlates with volume.
Volume by Asset Class
The fastest-growing exchange categories tend to see most of their volume in Bitcoin or Ethereum—unsurprising, given their status as the most popular investment cryptocurrencies.
There are exceptions:
- Derivatives exchanges, the fastest-growing category by value received, saw stablecoins as their largest asset by volume.
- Large hybrid exchanges and large C2C exchanges also recorded significant stablecoin volumes.
This may be because derivatives and C2C platforms cater to experienced traders who rely on stablecoins to hedge against crypto volatility when not actively trading.
The most successful exchanges aren’t overly reliant on a single asset. While Bitcoin and Ethereum dominate, top-performing platforms also support substantial volume in other asset types, indicating their ability to serve diverse user needs.
Innovation and Scale Drive Competitive Advantage
The 2021 cryptocurrency exchange landscape underscores that innovation and scale are critical to differentiation and growth.
DEXs represent a major innovation in crypto trading. These decentralized, non-custodial platforms have not only caught up with CEXs in activity—they have sometimes surpassed them, offering users greater control and enabling new transaction types.
Meanwhile, the CEXs that continue to grow are those offering a wide range of assets, appealing to active traders. C2F exchanges remain essential as on- and off-ramps between crypto and fiat currencies.
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Frequently Asked Questions
What is a decentralized exchange (DEX)?
A DEX is a platform that allows users to trade cryptocurrencies directly without an intermediary. Transactions are executed via smart contracts, giving users full control over their funds.
Why are transaction sizes larger on DEXs?
DEXs are often used by experienced traders and institutional participants who trade larger volumes. Additionally, DeFi’s prevalence in wealthier countries contributes to higher average transaction sizes.
How do derivatives exchanges differ from spot exchanges?
Derivatives exchanges enable trading of futures, options, and perpetual contracts rather than immediate asset delivery. They often see higher volumes in stablecoins due to their use in margin trading and hedging.
What caused the dip in exchange value in May–June 2021?
This decline coincided with China’s prohibition of cryptocurrency mining, which introduced uncertainty and temporarily reduced market activity.
Why are large exchanges outperforming small ones?
Larger exchanges typically offer better liquidity, more assets, and stronger security measures. They are also more recognizable to new users, creating a network effect that fuels their growth.
Will DEXs eventually replace centralized exchanges?
While DEXs are growing rapidly, CEXs still play a vital role—especially for fiat on-ramps and user-friendly interfaces. Both types of exchanges will likely coexist, serving different segments of the market.