July 19, 2023

🥛 2023’s Battle of the CEXs ⚔️

Today’s edition is brought to you by Domain Money – now everyone can access the financial resources that the wealthiest individuals use. 💰

GM. This is Milk Road. We’re like that friend who pours half a bottle of hot sauce into their gumbo – we’re built different.

Here’s what we got today:

  • Mid-2023 update: Which CEX is on top? 💪

  • VC funding is down BIG time 📉

  • The UK might regulate crypto memes 🇬🇧

  • One step closer to a Bitcoin ETF 🍪

Prices as of 8:30 AM ET.


Ladies & gents, welcome back to the Battle of the CEXs.

We’re halfway through the year and wanted to do a quick-in to see how things have been going…

First off… who fell behind? Binance.

And we’re nicknaming it the Conor McGregor of CEXs this year.

It was the top dog that knew how to trash talk and then injured itself and became the center of the drama.

It started losing market share to its competitors in Q1 and Q2. Dun dun duuuuuun

As a result, Binance’s quarterly accumulated trading volume fell from 53.6% → 50.6%, according to Token Insight data.

Yes, it’s still the top dog but it's losing its dominance.

So, who’s eating into that market share? 2 exchanges:

1/ Bitget – a crypto derivatives exchange

  • Its market share rose from 6.89% → 8.7%

  • Saw $60B in spot trading volume

  • It’s now a top 4 CEX

2/ OKX – a U.S.-based exchange

  • Its market share grew from 1.9% → 15.9% in Q2 (business has been boomin’)

  • It’s now a regulated exchange in Hong Kong

But there’s bad news for all CEXs… Bitcoin reserves are declining.

In 2020, there was ~3M BTC on exchanges.

Today, there’s ~2M BTC. (A 30% decrease.)

Why? Crypto investors have tons of trust issues.

Exchanges like FTX blew up, and everyone ran to cold storage like kids run to an ice cream truck.

Remember kids: not your keys, not your cheese.

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Many charts are in a downturn right now…

NFT volume. Blockchain devs. Metaverse users. People who think Elon can beat Zuck in a fight.

Well, there’s another one that’s plummeting: VC-backed crypto companies.


Here are some highlights:

  • In the first half of the year (H1), Web3 startups raised $3.6B. That’s down 78% from the $16B raised in H1 last year. Ouch.

  • Only 322 deals were closed in Q2 this year. That’s the lowest number of deals closed in a quarter since Q4 2020.

  • There were 3 companies that raised $100M+ in Q2 this year. In Q2 2022, there were 15 companies raised $100M.

The add insult to injury, Web3 funding has decreased for the last 7 quarters.

So, what’s the deal? Two words… Artificial Intelligence.

It’s been taking all the thunder (and money) away from crypto.

A.I. companies raised $25B in the first half of 2023. (~7x more than crypto companies.)

So, are we worried? No, it’s a 5 on our Milk Road Worry-Meter™.

VCs don’t make trends, they fund them.

The true trendsetters are builders & developers. And that’s the metric we care about most.

Unfortunately, it looks like crypto devs are down 22% over the last year.

(We give this an 8 on the Milk Road Worry-Meter. Gulp.)

So, if crypto wants to turn the tides and bring the money back into the industry it needs to do one thing: bring the devs back.

We’ll have to wait and see if it happens…


It seems like regulators are choosing a new part of crypto to go after every week.

This time? UK authorities coming after crypto memes.

Here are the fast facts:

  • The Financial Conduct Authority (FCA) created rules in 2015 around policing online financial product promotions

  • Now it wants those rules to apply to crypto memes

  • It’s concerned that memes could be considered financial promotions and mislead & deceive online users

The proposal also says violators could face up to 2 years in prison.

Tired: going to jail for defrauding users out of billions of dollars

Wired: going to jail for posting a doge meme

(Don’t worry, we’ll still keep our meme game going strong.)


The SEC has formally accepted Valkyrie’s Bitcoin ETF proposal. It’s similar to the application BlackRock submitted last week, but Valkyrie proposed a ticker for its ETF, $BRRR.

Aave launched a new algorithmic stablecoin ($GHO). It launched on the Ethereum mainnet and will be pegged to the U.S. dollar.

U.S. Congress members will meet with Brian Armstrong (CEO of Coinbase) later today to discuss crypto legislation. It’s reported that 100+ Congress members will be present. All Eyez On Brian.

Cathie Woods (CEO of Ark Invest) predicts that BTC will reach a price of $1.5M per coin. I love bold predictions but I think Cathie got into Snoop Dogg's “medicine” jar on this one…



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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.