March saw a notable slowdown in the activity across centralized exchanges, aligning with the overall trend of decreased trading volumes observed throughout the first quarter of the year. Despite the broader contraction in market activity, crypto derivatives displayed resilience, with the segment only contracting by 5% compared to more significant declines in spot trading.
Centralized exchanges as a whole experienced a dip in global traffic, particularly from regions traditionally more crypto-friendly. Notably, bearish sentiment and outflows from markets like South Korea and the United States contributed to the downward trend. However, Binance stood out as a major player, maintaining robust activity from global markets outside of these regions.
Spot Trading Decline
Spot trading volumes dropped by 16.6% in March, despite the influence of whale movements and selling pressure on major assets like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). A key trend noticed in this period was the diminished liquidity in the form of stablecoins across centralized exchanges, while the majority of the remaining liquidity continued to support crypto derivatives.
Stablecoins, which had been a major source of liquidity, also experienced a decline across all centralized exchanges. The total balance of stablecoins sank from over 48 billion to 45 billion tokens, reflecting both the broader market downturn and shifting investor behavior.
Regional Shifts and Exchange Activity
The outflow from centralized exchanges primarily impacted platforms like Crypto.com, Bybit, and Bitfinex, which saw sharp declines of 43.9%, 52.6%, and 31.1% in activity, respectively. A portion of the spot trading volume migrated to HTX, which saw a 29.4% increase in volumes during March.
On the other hand, derivative activity shifted towards Kraken, which saw a 28.3% rise in March. Conversely, Crypto.com experienced a 39.3% decline in derivative trading, further indicating the outflow of U.S.-based traders. Coinbase, similarly, lost traffic, a trend that signals waning confidence among U.S. traders despite the political uplift following the U.S. Presidential elections.
Despite these outflows, the U.S. markets remained the most liquid during Q1 of 2025, a reflection of their dominant position in the global crypto landscape.
Decentralized Exchanges and Emerging Opportunities
While centralized exchanges faced these outflows, decentralized exchanges (DEXs) were not immune to the downturn. Spot trading on DEXs now accounts for approximately 10% of the overall spot trading activity on centralized exchanges. However, the volatility of the market presented new opportunities, especially for risk-taking on decentralized platforms. Hyperliquid, for example, emerged as one of the busiest decentralized exchanges by daily trading volumes during March and early April.
Binance Maintains Leadership Amidst Declining Volumes
Binance continued to be a dominant force across both spot and derivatives markets, leading all centralized exchanges in terms of trading volumes. The exchange remains a key venue for crypto derivatives trading, recording some of the highest daily liquidations in the market.
In March, Binance maintained its position as a major liquidity provider, even amidst a market-wide slowdown. Despite a net outflow of BTC, the exchange is now recovering its available balance, signaling its robust resilience in times of market instability. Binance’s influence extends beyond derivatives, with over 60% of global spot market activity flowing through the exchange.
As one of the leading benchmarks for both spot and derivatives markets, Binance remains integral to the functioning of the crypto landscape, with its expansive liquidity, especially in BTC, ETH, and stablecoins.
Conclusion: A Slower Month, but Resilience in Derivatives
Overall, March proved to be the slowest month of 2025 thus far. While centralized exchanges saw significant declines in both spot and derivative trading volumes, crypto derivatives continued to show more resilience than spot markets. Binance, in particular, maintained its leadership role, providing much-needed liquidity and activity during a slower period for the industry. As the first quarter ends, traders and investors will look to the coming months to determine whether this trend of contraction will continue or if the markets will stabilize and recover.
