Retail traders and quantitative firms are driving increased adoption of decentralized exchanges (DEXs), while institutional investors continue to favor centralized exchanges (CEXs), according to Bitget’s latest analysis from September 2025.
The growing preference for DEXs among retail users highlights a shift towards transparency and self-custody, though institutions are hesitant due to compliance and liquidity concerns.
Retail Users Boost DEX Growth with Transparency Demands
Bitget highlights the shift of retail users to DEXs, driven by demand for transparency. Gracy Chen, Managing Director at Bitget, notes the rise in non-custodial trading among retail and quants. Institutional interest remains focused on CEXs.
Gracy Chen emphasizes that retail and quantitative traders propel DEX adoption due to transparency and self-custody. The rapid growth in DEX trading volumes is an indicator of this preference. Institutions still rely on CEXs for their flow of assets.
30% Surge in DEX Trading Among Retail and Quants
There has been an increase of about 30% in DEX weekly trading volume for retail and quantitative traders. The data from Bitget confirms institutional reliance on CEXs has not diminished, despite the retail-driven surge in DEX transactions.
The financial market sees constant debate over the benefits of self-custody versus institutional compliance requirements. Gracy Chen, Managing Director, Bitget, notably stated: “Retail users and trading firms are migrating to DEXs for transparency and self-custody, but most institutional flows are still on CEXs.”
Historical patterns suggest institutions remain on CEXs due to regulatory clarity and ability to handle large asset flows efficiently.
Major Institutions Favor CEXs for Large Asset Transfers
Historically, events like the 2021 ‘DeFi Summer’ and FTX’s collapse in 2022 saw temporary shifts of retail to DEXs. Large funds need fiat on/off ramps, suggesting continuity in CEX use despite temporary increases in DEX activity.
Experts, including Hayden Adams, underscore the alignment of self-custody and mainstream adoption. Yet, Arthur Hayes points out institutional moves only align when DEX compliance matches CEX standards, leading to steady institutional flow primarily through CEXs. “Retail always moves first on new tech. Institutions follow only when risk and compliance boxes are checked.”
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