The Decline in Cryptocurrency Trading Volume
Introduction
The combined cryptocurrency spot and derivatives trading volume on centralized exchanges declined 11.5% to $2.09T, falling to the lowest combined monthly trading volume this year and the second-lowest since October 2020.
Weakening Volume
The weakening volume tracked the movement in price, marking the biggest long liquidation event since the FTX collapse, CCData said in its August Exchange Review.
Price Movements
- During the month, Bitcoin (BTC-USD) and ethereum (ETH-USD) each dropped 13%.
- XRP (XRP-USD) tumbled 30%.
- Cardano (ADA-USD) fell 17%.
Spot Trading Decline
Spot trading on centralized exchanges fell for the second straight month, dropping 7.8% to $475B, the lowest monthly spot trading volume since March 2019.
Comparison to Bear Market
“The trading volumes on centralised exchanges have remained low since April this year and are now comparable to the stagnant trading activity in the bear market of 2019,” according to the report.
Grayscale’s Win
Even Grayscale’s win over the SEC late in the month failed to buoy volume and bitcoin’s (BTC-USD) price for the month. While the court vacated the SEC’s rejection of converting Grayscale Bitcoin Trust into an exchange-traded fund, it doesn’t give Grayscale permission to proceed with the conversion.
Derivatives Volume Decline
Derivatives volume fell 12.5% in August to $1.62T, the lowest level since December 2022 and the second lowest derivatives trading volume since 2021. With that decline, derivatives’ share of the entire crypto market slid to 77.3% from 78.2% in July, the third straight month of market share losses.
Biggest Exchanges
Binance remains the biggest exchange for both the spot market and derivatives. With $183B in spot market volume, it holds a 38.5% share, which is its lowest since August 2022. Huobi, with $28.9B of spot market volume, saw its market share increase to 6.09%, making it the second-largest exchange.
Derivatives Market Share
Binance’s derivatives volume was $865B for a 53.5% market share, followed by OKX at $315B with a 19.5% share, and Bybit at $205B with a 12.7% share, according to the CCData report.
Crypto-Exposed Stocks
Crypto-exposed stocks also sank during August, as seen in the chart below, with bitcoin miners Riot Platforms (NASDAQ:RIOT), Marathon Digital (NASDAQ:MARA), and Hut 8 Mining (NASDAQ:HUT) each falling about 30% for the month.
