Crypto trading volume falls to 18-month low, Coinbase feels the pinch

Bloomberg News reported that crypto trading volume fell to its lowest level since 2020 at the end of June due to prevailing market conditions.

The report cited data from CryptoKitties to show that derivatives and spot trading volumes at crypto exchanges have fallen by more than 15% since May.

Spot trading volume fell 28% on a monthly basis to $1.41 trillion as the price of bitcoin (BTC) fell to its lowest level since December 2020.

Derivatives trading volume fell 7% in this period to the lowest level since July 2021.

The derivatives market comprises more than 50% of the industry, with its decline reflecting a broader downtrend of the current crypto winter conditions.

Investors are getting cautious

The decline in trading volume reflects only the broader market. Major digital assets such as Bitcoin and Ethereum (ETH) are trading at more than 70% of their all-time highs, prompting investors to be cautious.

It is 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 world markets at TIAA Bank, told Bloomberg that investors would not want to buy “something that is in free-fall or even something that has fallen and stabilized”.

unfavorable macroeconomic conditions

In addition to the decline in the value of these digital assets, the current macroeconomic conditions have also contributed significantly to the decline in the purchasing power of investors.

Inflation in the United States has reached its highest point in the past 40 years, according to data released by the Bureau of Labor Statistics.

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Record inflation levels have given rise to speculation that the US Fed may raise interest rates by 100 basis points.

Coinbase feels the pinch

Crypto exchanges are already seeing the impact of declining trading volumes in their numbers.

According to Bloomberg, Coinbase has dropped from the top ten exchange and is now the 14th largest exchange.

According to the report, it currently has an average market share of 2.9% among the top 30 crypto exchanges, which is much lower than 5.3% in the first quarter and 3.6% in the second quarter.

Meanwhile, data from Nomix showed that the exchange trading volume is lagging behind OKX, FTX and ByBit over the past 30 days. However, despite advances made by rivals such as Binance.US, it remains the dominant exchange in the United States.

Crypto exchanges are also now implementing new strategies to encourage people to trade. One example is Binance.US which has removed spot trading fees for its bitcoin transactions.

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