Coindesk reported a recent note to customers from analysts at JP Morgan, stating their belief that centralized cryptocurrency exchanges will still remain dominant. Despite the events of the past months rocking the market, JP Morgan is confident a shift to decentralized exchanges is not imminent.
With FTX plummeting to bankruptcy, many consumers have questioned the longevity of centralized dominance in the market. Yet, JP Morgan has assured them any sort of transition from centralized exchanges won’t be occurring for a long time.
JP Morgan Affirms Centralized Dominance
The fall of FTX was unlike anything the cryptocurrency industry has experienced. Seemingly overnight, one of the biggest cryptocurrency exchange platforms on the planet went bankrupt. Furthermore, the scandal and contagion of their collapse infected much of the industry that is further exposed to them.
These events have led many to profess the impending downfall of centralized exchange platforms. Moreover, many experts believe that the answer to the scandal caused by FTX is not in regulation, but in the rise and acceptance of DeFi and decentralized cryptocurrency platforms.
One of the biggest names in banking, however, isn’t so sure about that. A report from Coindesk has pointed to a client note from JP Morgan on Thursday from the bank’s strategist, Nikolaos Panigirtzoglou.
Coindesk reported, “Decentralized Exchanges (DEXs) slower transaction speeds, pooling of assets and order- traceability features are likely to limit institutional participation,” was contained in the note. Furthermore, it pointed to the inherent risk as a massive deterrent to its potential rise.
The note added, “The management, governance, and auditing of DeFi protocols without compromising too much on security and centralization is a big challenge.” Yet, there is no denying that the popularity of the decentralized exchange has grown since FTX’s downfall.
DefiLlama data shows trading volumes are up 68%. Additionally, it reached $97.22 billion in October alone. Moreover, There is rising viability in platforms decentralized exchanges like DexGuru, dYdX, and Uniswap. JP Morgan could be discounting how customers are already reacting to the FTX scandal.