Centralized cryptocurrency exchanges (CEXs) are still the key to attracting more mainstream retail adopters as the industry moves on from the notorious collapse of the FTX exchange.

Despite the collapse of the FTX exchange, which caused at least $8.9 billion in lost user funds, CEXs remain the first layer of interaction for retail adopters buying their first cryptocurrency.

The next 100 million retail adopters will likely onboard the industry through CEXs, according to Ruslan Fakhrutdinov, the founder and CEO of cryptocurrency trading platform X10. Speaking exclusively to Cointelegraph, Fakhrutdinov said that centralized exchanges would likely drive user adoption:

“Centralized exchanges will lead the game for now. However, when you get new retail into the space, it’s essentially much easier to switch a user from a centralized exchange to a hybrid exchange, versus bringing in a completely new user.”

The primary reason for new investors choosing CEXs is because of the element of trust in the underlying company, along with a more intuitive trading experience.

To attract more traditional retail investors, hybrid and decentralized exchanges need an improved user experience and renewed marketing efforts, explained Fakhrutdinov:

“Hybrid exchanges are pursuing crypto native marketing. To attract regular retail, their approach to marketing needs to be a little different. It needs to be more like regular think tanks than crypto [specific].”

X10 positions itself as a hybrid exchange platform and was founded by team members who previously worked at neobank Revolut. Its infrastructure features a hybrid central limit order book that executes trade settlements on-chain through StarkEx's layer-2 engine.

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Hybrid crypto exchanges could reestablish trust after the FTX collapse

Going against Bitcoin’s (BTC) ethos of decentralization, CEXs are controlled by a central party or company, creating third-party vulnerabilities.

Despite emerging alternatives like decentralized exchanges (DEXs) and hybrid exchanges, CEXs control the majority of crypto trading volume.

According to Dune, cumulative trading volume on DEXs reached a total of $3.56 billion during the past 24 hours, which is over four times less compared to the $15.1 billion trading volume amassed by Binance, the world’s largest CEX.

Hybrid exchanges are emerging as a middle ground between CEXs and DEXs, combining the workflow and trading experience of centralized exchanges, with the non-custodial elements of decentralized exchanges.

Hybrid exchanges could help restore trust in the crypto industry, following the FTX collapse according to Fakhrutdinov, who explained:

“Currently I would say that the next generation of [crypto] exchanges should be trustless but not necessarily permissionless.”

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Robinhood’s Bitstamp acquisition is a positive sign for institutional adoption

On June 6, stock trading app Robinhood announced purchasing Bitstamp crypto exchange in a $200 million deal, enabling the app to serve institutional clients in the United States.

Along with Revolut launching its crypto exchange, these are net positive signs for institutional crypto adoption, that will bring more “retail flows” in the industry, Fakhrutdinov explained:

Popular global neobank Revolut debuted its crypto exchange for United Kingdom users at the beginning of May.

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