Crypto trading volume plunges to 18-month low, Coinbase feels the pinch
Cryptocurrency trading volume fell to its lowest point at the end of June since 2020 due to current market conditions, Bloomberg News report..
The report, citing data from CryptoCompare, revealed that derivatives and spot trading volumes have declined by more than 15% across cryptocurrency exchanges since May.
Spot trading volumes fell 28% on a monthly basis to $ 1.41 trillion as Bitcoin (BTC) prices fell to their lowest level since December 2020.
Derivatives trading volume fell 7% during the period to close at its lowest since July 2021.
The derivatives market accounts for more than 50% of the industry, and its decline shows that the current winter situation for cryptocurrencies is widespread.
Investors are becoming more cautious
The decrease in trading volume simply reflects the expansion of the market. Key digital assets such as Bitcoin and Ethereum (ETH) are trading more than 70% below record highs, raising caution among investors.
Investors are unlikely to trade at the same pace as the bull market, and experts believe that trading volumes will remain low for some time.
Chris Gaffney, president of TIAA Bank’s global market, told Bloomberg that investors do not want to buy “free fall or fall and stable”.
Unfavorable macroeconomic situation
Apart from the decline in the value of these digital assets, the current macroeconomic situation has also contributed significantly to the decline in investor purchasing power.
Inflation in the United States has reached its highest level in the last 40 years, according to data released by the Bureau of Labor Statistics.
Record inflation has led to speculation that the Federal Reserve could raise interest rates by 100 basis points.
Coinbase feels a pinch
Cryptocurrency exchanges have already seen the impact of lower trading volumes.
according to BloombergCoinbase has dropped out of the top 10 exchanges and is currently ranked 14th largest exchange.
According to the report, the average market share of the top 30 crypto exchanges is currently 2.9%, well below 5.3% in the first quarter and 3.6% in the second quarter.
in the meantime, data According to a Nomics survey, exchange trading volumes over the last 30 days lag behind OKX, FTX, ByBit and others. However, despite advances from rivals like Binance.US, it remains the dominant exchange in the United States.
Cryptocurrency exchanges are currently implementing new strategies to encourage people to trade. An example is Binance.US, which removes spot trading fees for Bitcoin trading.
