Cryptocurrency trading volumes decrease for the first time since September 2023
Last month, the impact of U.S. macroeconomic factors and geopolitical unrest infiltrated the crypto market sentiment, resulting in a significant decrease in trading volume not witnessed in over 30 weeks.
Data analytics from CCData revealed that spot trading volumes on popular cryptocurrency centralized exchanges (CEX) like Binance and Coinbase plummeted by 32.6% in the previous month as a widespread correction swept across various market sectors. The spot trading volume dipped to $2 trillion for the first time since September of the previous year. Additionally, trading volumes for derivative tokens also experienced a substantial decline, reaching a seven-month low of $4.5 trillion, marking a 26.1% decrease. Binance, one of the largest CEXs in the crypto space, saw a 4% reduction in its market share, bringing its digital asset trading dominance down to 33.8%.
The observed trend reversal could be linked to a common historical pattern that typically follows Bitcoin (BTC) halving events. Last month, a halving took place that reduced the number of newly minted tokens by 50%, impacting the revenue of Bitcoin miners and increasing the scarcity of BTC. CCData researcher Jacob Joseph noted that trading activity on CEX platforms tends to cool off after halvings, with investors feeling uncertain due to inflation concerns in the U.S. and apprehensions about potential rate hikes.
Earlier in the year, the approval of spot Bitcoin ETFs by the U.S. SEC contributed to a surge in bullish sentiment, propelling crypto prices to new all-time highs (ATH). Bitcoin surpassed its previous ATH of $69,000 from 2021, reaching a new record of over $73,000 in March. Notable Wall Street players like BlackRock and Fidelity managed to accumulate over $10 billion in assets under management shortly after launching, setting new records. However, recent weeks have seen persistent outflows despite these achievements.
Although the overall market appears to be in a post-halving lull and spot BTC ETFs are struggling to attract new liquidity, Manthan Dave, co-founder of Palisade, expressed optimism to crypto.news, predicting that prices would significantly increase by the end of the year. Dave also believes that the approval of spot Ethereum ETFs could draw more capital into the crypto markets, providing an alternative to Bitcoin-based investment vehicles.
