Trading volumes at digital-asset exchanges have halved amid a loss of confidence in the crypto sector following the collapse of Sam Bankman-Fried’s FTX platform.

Daily average trading volume slid to $13.1 billion in the week through Dec. 11 versus $26.7 billion in the seven days to Oct. 30, according to Bloomberg calculations on data from research firm Kaiko.

FTX’s fall into bankruptcy began to rock the crypto sector from early November and is still causing contagion. Bankman-Fried has been arrested and charged with fraud for allegedly misappropriating billions of dollars of customer money.

The drop in trading volumes may partly reflect fearful investors yanking their coins off crypto platforms and anticipating little respite from a $2 trillion rout in digital assets since a peak in November 2021.

“The public is afraid more exchanges will fail, and have pulled assets off exchanges en masse,” said Hayden Hughes, chief executive officer of social-trading platform Alpha Impact. “Trading firms and market makers have also pulled assets, meaning lower volume overall.”

The figures from Kaiko span platforms accounting for the majority virtual-asset trading, including the likes of Binance, Bitfinex, Coinbase, OKX and Kraken. Such centralized platforms take custody of client assets whereas their much smaller decentralized rivals leave the safe-keeping of tokens with owners.

The guardianship of tokens is a topic of intense debate in FTX’s shadow. But decentralized exchanges — sometimes called DEXs — have also suffered: their daily average volumes sank about 44% to $1.5 billion in the week through Dec. 11 from $2.6 billion in Oct. 24-30, according to data from DefiLlama.

Among the challenges is that the “user experience and execution on DEXs is so different from centralized exchanges,” said Katie Talati, director of research at digital-asset specialist Arca.

Bitcoin, Ether and a gauge of the top 100 tokens are all down more than 60% this year, which is shaping up to be among the worst ever in crypto.

Rapidly tightening monetary policy sapped speculative ardor and sparked a series of blowups at risky crypto outfits, leaving many prognosticators unsure about what kind of future lies ahead for digital assets.

--With assistance from Sidhartha Shukla.

This article was provided by Bloomberg News.