Cryptocurrency Derivatives Trading Soars to $3.12 Trillion in July, Boosting Overall Crypto Volumes
The cryptocurrency derivatives trading market experienced a significant surge in July, reaching $3.12 trillion, according to a report by CryptoCompare. This marks a 13% increase from the previous month and indicates a recovery in crypto prices after the recent market crash. The derivatives market now accounts for 69% of total crypto volumes, up from 66% in June, contributing to the overall crypto volumes on exchanges, which reached $4.51 trillion in July.
Derivatives Exchanges Break Records in July
On July 29, derivatives exchanges achieved a trading volume of $245 billion, surpassing the previous high of $223 billion in June. However, spot cryptocurrency trading experienced a decline, falling to $1.39 trillion in July, the lowest level since December 2020.
Speculation and Upcoming Ethereum Merge
The rise in derivatives trading volume suggests increased speculative activity among traders who anticipate further upside in the market rally. CryptoCompare also highlights that there will be no U.S. Federal Reserve meeting in August. Additionally, traders are speculating on the upcoming Ethereum merge, an upgrade of the Ethereum network expected in September. Ether has already risen to approximately $1,900 from its low of $880 in June.
Binance Dominates, Coinbase Reports Losses
Binance remains the leading exchange, holding 54% of the market share. Atom Asset Exchange (AAX) secured the second-largest position with a 26.5% volume increase in July. However, Coinbase reported a larger-than-expected quarterly loss, with trading volumes more than halving in the second quarter of 2022.
Hot Take: Crypto Derivatives Trading Surges in July, Indicating Market Recovery
The surge in cryptocurrency derivatives trading volume in July reflects a renewed optimism among traders as crypto prices bounce back from the recent market crash. The derivatives market now constitutes a significant portion of total crypto volumes, indicating increased interest in speculative trading. The upcoming Ethereum merge and the absence of a U.S. Federal Reserve meeting in August are driving further speculation in the market. Binance continues to dominate the exchange landscape, while Coinbase faces challenges with declining trading volumes. As the crypto market continues to recover, traders are eagerly watching for further price movements and developments in the industry.
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