Volatility after Grayscaleโs Court Victory Fails to Boost Trading Volumes on Centralized Exchanges
A recent report by CCData outlines that the combined volumeย ofย trading of spots and derivatives on centralized exchanges hasย decreased by 11.5% to $2.09 trillion. Regardlessย of the volatility that followed Grayscaleโs victory over the SEC, this market movement did not translate into increased trading volumes. The report impliesย that theย present market is largely driven by speculation, as evidenced by low spot volumeย ofย trading and fluctuations in open interest data.
It is worth keepingย inย mindย that the trading volumes might have been even worse if not for two brief spikes in volatility. On August 17, Bitcoinโs price plunged over 10% to $25,000, reflecting risk aversion in traditional markets. Nonetheless, on August 29, the price briefly rose to $28,000 in response to Grayscaleโs legal victory over the SEC.
Binance, the leading exchange, experienced a decline in its spot market share for the Sixth consecutive 30ย days, reaching its lowest point since August 2022 at 38.5%. Its share in derivatives likewise dropped to 53.5%, the weakest since June 2022. Regardlessย of this, Binance remains the top exchange with $183 Billion in spot volumeย ofย trading and $865 Billion in derivatives. In June, Binance faced charges from the Unitedย States SEC for violating securities law.
Onย theย otherย sideย , Huobi saw a 2.26% increase in its share of worldwide spot market activity, accounting for 6.09% of the total spot market volume. This made Huobi the second- largest centralized spot exchange by volume.
Bitget and Bybit experienced growth in their shares of total activity in the derivatives market, reaching 8.66% and 12.7%, respectively.
Increased Institutional Activity
The total cryptocurrency derivatives volume on the Chicago Mercantile Exchange, considered an indicator of institutional activity, rose by 4.51% to $41.9 billion. Notably, volumes in ether options reached an record-breakingย peak of $365 million.
Hot Take
The lack of increased trading volumes on centralized exchanges regardlessย of volatility of the market raises questions about theย present state of the digitalย currency market. It impliesย that speculation rather than fundamental factors might be driving price movements. As institutional activity continuesย to grow, it will be interesting to see how these dynamics evolve in the future.
Cora Skindell is a standout figure in the world of cryptocurrency analysis, research, and editorial expertise. As a seasoned crypto analyst and researcher, Cora’s insights delve deep into the complexities of digital assets, resonating with a diverse audience. Her ability to dissect intricate crypto concepts is complemented by her adept editorial skills, enabling her to distill complex information into easily understandable content.
