Crypto Spot Market Records Lowest Trading Volume in 4.5 Years Amidst Lack of Activity Despite Volatility

Crypto Spot Market Records Lowest Trading Volume in 4.5 Years Amidst Lack of Activity Despite Volatility

Volatility after Grayscale’s Court Victory Fails to Boost Trading Volumes on Centralized Exchanges

A recent report by CCData outlines that the combined volume of trading of spots and derivatives on centralized exchanges has decreased by 11.5% to $2.09 trillion. Regardless of the volatility that followed Grayscale’s victory over the SEC, this market movement did not translate into increased trading volumes. The report implies that the present market is largely driven by speculation, as evidenced by low spot volume of trading and fluctuations in open interest data.

It is worth keeping in mind that the trading volumes might have been even worse if not for two brief spikes in volatility. On August 17, Bitcoin’s 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 Grayscale’s legal victory over the SEC.

Exchanges and Market Share

Binance, the leading exchange, experienced a decline in its spot market share for the Sixth consecutive 30 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. Regardless of this, Binance remains the top exchange with $183 Billion in spot volume of trading and $865 Billion in derivatives. In June, Binance faced charges from the United States SEC for violating securities law.

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On the other side , 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-breaking peak of $365 million.

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Hot Take

The lack of increased trading volumes on centralized exchanges regardless of volatility of the market raises questions about the present state of the digital currency market. It implies that speculation rather than fundamental factors might be driving price movements. As institutional activity continues  to grow, it will be interesting to see how these dynamics evolve in the future.

Author – Contributor at | Website

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.

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