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Trading on cryptocurrency exchanges has collapsed for the first time in seven months
(Bloomberg) — Trading volume on major cryptocurrency exchanges fell in April for the first time in seven months, while the Bitcoin market gauge retreated from a record high.
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According to data from researcher CCData, spot trading volume on so-called centralized exchanges such as Coinbase Global, Binance and Kraken slumped 32.6% to $2 trillion last month. Derivatives trading volume also fell for the first time in seven months, falling 26.1% to $4.57 trillion.
While trading volume skyrocketed earlier this year with the introduction of US Exchange Traded Funds investing in Bitcoin, it has declined amid tightening financial conditions in the US, where the Federal Reserve faces challenge of overcoming sticky inflation. The Bitcoin halving on April 19, when the supply of new coins minted on the network halved, was an early catalyst for market excitement.
“Consistent with patterns observed over the past two cycles, trading activity on centralized exchanges typically slows in the two months following the Bitcoin halving event,” said Jacob Joseph, research analyst at CCData. “Additionally, higher-than-expected CPI inflation data and escalating geopolitical tension in the Middle East have pushed some uncertainty and fear into the market. This coincides with negative net flows from spot Bitcoin ETFs, driving the price of major crypto assets to lows.”
As volumes fell, the spot market share of the world’s largest cryptocurrency exchange, Binance, fell for the first time since September 2023. The share fell nearly 4% to 33.8%, the share lowest spot market rate for the exchange since January, according to CCData.
CME Group also reported its first decline in cryptocurrency trading volume in seven months. In April, derivatives trading volume fell nearly 20% to $124 billion, according to CCData.
“Despite this, although trading activity on centralized exchanges has slowed from its peak in March, it remains at a high level compared to volumes seen in other months,” Joseph said.
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