Crypto Trading Volumes Decline for First Time Since September 2023

Macroeconomic factors and US geopolitical turmoil influenced crypto sentiment last month, resulting in a volume pullback not seen in over 30 weeks.

CCData analysis showed that spot trading volumes on centralized cryptocurrency exchanges (CEX) such as Binance and Coinbase plunged 32.6% last month as a broad correction swept across market sectors.

Spot trading volume knocked down to US$2 trillion for the first time since September last year. Derivative token trading volumes also fell to a seven-month low of $4.5 trillion, marking a 26.1% decline. Crypto’s largest CEX Binance lost market share as trading activity retreated from highs recorded earlier this year. Due to the 4% drop, the platform’s dominance over digital asset trading reduced to 33.8%.

According to the data provider, the trend reversal can be attributed to a common historical pattern following Bitcoin (Bitcoin) halves. Last month, a change was released that reduced the amount of newly mined tokens by 50%, reducing Bitcoin miners’ revenue and increasing BTC scarcity.

CCData researcher Jacob Joseph wrote that CEX trading cooled off after the previous two halves. The analyst further opined that current inflation concerns in the US have shaken market confidence as investors remain skeptical about rate hikes.

“The higher than expected CPI inflation data and the escalation of geopolitical tension in the Middle East brought some uncertainty and fear to the market. This coincides with negative net flows from spot Bitcoin ETFs, driving the price of major crypto assets to their lows.”

Jacob Joseph, researcher at CCData

Earlier this year, the US SEC’s approval of spot Bitcoin ETFs solidified bullish sentiment and sent cryptocurrency prices soaring to all-time highs (ATH). Bitcoin broke its previous ATH of $69,000 from the 2021 peak, setting a new record of over $73,000 in March.

Wall Street leaders like Black stone and Fidelity accumulated more than $10 billion in assets under management within weeks of launching, breaking records but exits persisted in recent weeks.

While the overall market has seemingly entered a post-halving lull and spot BTC ETFs have struggled to attract new liquidity, Palisade co-founder Manthan Dave told crypto.news that prices would be much higher at the close of the year .

The expert also believes that this place Ethereum ETFIf approved, it could attract more capital to the cryptocurrency markets and offer an alternative to Bitcoin-based vehicles.

Spot bitcoin ETFs are a game changer. In the long term, they will increase confidence in cryptocurrencies and reduce overall market volatility. What will happen when the Ethereum ETF launches remains to be seen. It will certainly bring new capital, as Ethereum is “greener” than bitcoin. But it is also likely to draw capital out of the bitcoin ETF as investors look to diversify.

Looking at what’s on the horizon, we’re likely to see bitcoin reaching $100,000 by the end of this year.

Manthan Daveco-founder of Palisade

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