Adoption and re-centralisation can happen together

Crypto Is Being Re-Centralised.

And nobody talks about it.

It is always just bullish or bearish, but no one talks about the fact that adoption is already here and at the same time it was the end of many things.

Here Are the Numbers and facts:

➡️ My core thesis: crypto is decentralised on chain and still 100% centralised in power:

Most users do not interact with blockchains.

They interact with infrastructure.
Order books on CEXs.
Stablecoins as money.
Custodians as vaults.
Staking providers as coordinators.

These are control layers.
They decide who gets liquidity, what becomes liquid, which assets survive, and which users are throttled.
This is where power lives today.

Crypto can remain mathematically decentralised while becoming economically and politically centralised.

That is the modern paradox of the industry..deeper:

CEX order books, stablecoins, custodians, and a small set of staking coordinators. These layers decide who gets liquidity, what becomes liquid, what gets listed, and what gets throttled. That is where control lives today. Mathematical decentralisation does not prevent economic centralisation. Power migrates to the interface layer.

➡️ Price discovery is still dominated by a few CEXs:

TokenInsight’s 2025 exchange report puts Binance at 42.09% spot market share!

Again, 42% is just under the power of Binance.

The next venues are far smaller:
Bybit 8.63%,
MEXC 8.49%,
Gate around 8%,
Bitget 6.86%,
OKX 6.83%,
Coinbase 6.58%.

This is a hub-and-spoke system.
When 1 venue anchors more than 40% of spot liquidity, the entire market inherits that venue’s internal rules, outages, listing politics, surveillance systems, and liquidation dynamics.

Price discovery becomes institution-dependent, not protocol-dependent. 100%.

Practical consequence: a venue-level shock becomes a market-level shock. The chain can be perfectly functional and the market can still break.

➡️ CEXs are structurally conflicted businesses, regulators explicitly warn about this:

IOSCO’s global policy recommendations list conflicts of interest from vertical integration as a primary risk in crypto markets.

Large CEX groups combine trading venue, broker-like execution, custody, market-making incentives, staking, lending, and token relationships inside 1 corporate structure. In tradfi these functions are separated to prevent abuse.

In crypto they are bundled. This produces permanent misalignment: users take downside risk while platforms control assets, rules, data, and access. The exchange is both referee and player.

Result: losses are socialised. Power is not.

➡️ Proof of Reserves is not the safety guarantee it is marketed as:

PwC Switzerland states that Proof of Reserves in its current form has fundamental limitations and does not provide a complete picture of an organisation’s financial health.

PoR usually shows partial on-chain assets at a moment in time. It does not show full liabilities, off-balance-sheet obligations, governance quality, or group-wide risk. A platform can appear solvent on-chain while being institutionally fragile. PoR reduces uncertainty. It does not eliminate insolvency risk.

FTX would likely have passed early PoR snapshots!

➡️ Stablecoins are a giant centralisation layer and they dominate CEX flows:

The ECB shows that reserve assets for USDT and USDC consist predominantly of US Treasuries, reverse repos, money market fund shares, cash, and bank deposits. Reuters, citing the ECB, reports that around 80% of global trades on centralised crypto platforms involve stablecoins and warns of run risk and forced liquidation of reserve assets.

CLS independently states that stablecoins account for about 80% of trading volume on major exchanges. Stablecoins are not a side tool.

They are the settlement layer of crypto markets. If stablecoin confidence cracks, liquidity cracks.

Centralisation here is balance sheets, custodians, and redemption gates.

➡️ ETF era: ownership decentralised, custody and control concentrated:

CoinShares reports that Grayscale, BlackRock, and Fidelity control 89% of US Bitcoin ETF assets.
89%!
Coinbase publicly states it was selected as custodian for 8 of 11 spot Bitcoin ETF mandates.

Reuters apparently reports Coinbase dominates crypto ETF custody, servicing more than 80% of issuers. This concentrates control twice: issuer concentration and custody concentration.

These become regulatory and operational chokepoints layered on top of a decentralised asset that was designed to eliminate chokepoints.

➡️ Staking can decentralise consensus while centralising decision making:

Even with thousands of validators, stake gravitates toward a few operators because users optimise for convenience, yield, and liquidity.

Liquid staking and large providers become default coordination layers. Governance weight, upgrade influence, and censorship leverage concentrate over time. IOSCO’s later thematic review still warns that inherent conflicts in crypto market structures remain insufficiently addressed.

This mirrors CEX dynamics: bundling, scale advantages, and network effects create winner-take-most outcomes.

➡️ The comparison that actually matters: protocol failure versus institution failure:

Protocol failure tends to be transparent, bounded, and on-chain. Institution failure is opaque, legal, political, and contagious across custody, liquidity, and price discovery. This is why CEX dominance is not merely “not your keys”. It is systemic fragility.

➡️ Decentralised rails do not guarantee decentralised power:

Crypto runs on decentralised protocols and centralised infrastructure. The real chokepoints are trading venues, stablecoin issuers, ETF custodians, and staking coordinators.

🔺These entities can freeze, censor, throttle, and reshape incentives at scale. 🔺

If this concentration continues, crypto does not replace legacy finance.

It reconstructs it, just faster, louder, with stronger monopolists and with fewer safeguards.

Honestly, crypto price discovery is in many ways more centralised than the system it originally set out to replace. And we are all responsible for that.

I doubt this will change.

And 10/10 was not an exception. It was a warning shot.

A visible catastrophe, yes, but not an anomaly.

It is the structural outcome of the market we have built.

And it is exactly what we should expect going forward.

I, a small and insignificant crypto enthusiast, warned about this from the very beginning. And alone in the last 2 years the situation has changed so much that I think there is no way back.

Anyone who actually read this and wants to go deeper into the material, here are the sources for my article:

TokenInsight: Crypto Exchange 2025 Annual Report
https://t.co/T3TUqGhpgk

IOSCO: Policy Recommendations for Crypto and Digital Asset Markets, 16 Nov 2023 (PDF)
https://t.co/2HbWqPxubb

IOSCO: Policy Recommendations for Crypto and Digital Asset Markets, Consultation Version (PDF)
https://t.co/2dcwXbK9TU

IOSCO: Thematic Review Assessing the Implementation of IOSCO’s Crypto and Digital Asset Recommendations, 25 Oct 2025 (PDF)
https://t.co/a1jQxaaEwM

PwC Switzerland: Does Proof of Reserves Provide Meaningful Trust and Transparency
https://t.co/p7nrXI95F4

ECB Financial Stability Review Focus Box: Stablecoins on the Rise, 26 Nov 2025
https://t.co/V13mGnJoGF

Reuters: Stablecoins Could Siphon Off Euro Zone Bank Deposits, ECB Warns, 24 Nov 2025
https://t.co/d65hNSMbNM

CLS Group: Can Stablecoins Play a Role in the FX World, 24 Sept 2025 (PDF)
https://t.co/AMsWTL8j1e

CoinShares: Institutional Report, 13F Bitcoin ETF Data Q3 2025
https://t.co/zUnDrQVejH

Coinbase: How We Keep Digital Assets Safe, 4 Mar 2024
https://t.co/qShKD54W2G

Reuters: US Bancorp Revives Institutional Bitcoin Custody Service, 3 Sept 2025
https://t.co/d9TaxQkRuT

By the way, the video from the Coinbase CEO is complete bullshit.

CEX CEO portrays himself as the savior of ordinary users and banks as the villains. In reality, banks are simply more regulated, more professional, and often more politically independent than the CEX mafia.

We all see how the money flows and backroom deals with the current administration look.

So always take this with caution.

None of this is good in any way.