Definitely, but there is still a huge demand for KYC-free services. You can tell as much by the way Binance operates: They are willing to segregate their markets rather than go fully compliant. It's also basically a given that a host of countries won't be complying with the FATF travel rule, leaving the door open to non-compliant exchanges.
And that's where things get interesting. Are the Coinbases and Geminis and Bitpays of the world going to blacklist outputs from exchanges like Binance? Bitmex? Smaller altcoin and derivatives exchanges?
Sure, a major reason why Binance has a large market share among BTC/altcoin exchanges is them having lax KYC requirements. But there's a reason why more and more places are forcing their users to go through increasingly onerous KYC. Same might happen with the travel rule, some exchanges have been asking a lot of instrusive questions about the provenance of peoples' coins for a while now. Binance is already asking for KYC to participate in IEOs and for margin trading...