Total trading volume on centralized exchanges declined by 21.8% in June, marking a third consecutive month of declining trading activity since March.
A report from CC Data revealed that the combined spot and derivatives trading volumes across centralized exchanges was $4.2 trillion a far cry for when it hit its peak in March with a total of $9 trillion in trading volume.
The report highlighted reasons for this noticeable decline in trading volume pointing at a sharp decline in open interest in derivatives exchange.
In June, open interest on derivatives exchange fell 9.67% to $47.11 billion. The trend persisted into July with Top centralized exchange Coinbase witnessing a significant decline in Open interest, dropping by 52.1% to $18.2 million.
The report attributed the drop in open interest to a drop in crypto prices resulting from massive selling pressure in the market.
It is to be noted that the activities of the German government which sold approximately 50,000 Btc assets and the proposed redistribution of over $9 billion worth of BTC assets to creditors by Mt. Gox all happened at this period.
On the future’s market, the Chicago Mercantile Exchange (CME) known as the world’s largest institutional derivatives exchange also witnessed a decline.
The report highlighted major decline in interest for futures contract for major crypto assets like Bitcoin and Ethereum. Bitcoin futures trading volume declined by 11.5%, while Ethereum futures fell by 15.8%. The total futures trading volume fell by 11.5% to $103 billion in June following a strong performance in May.
In terms of Market share amongst centralized exchanges. Binance lost some of its market share while Bybit and other fringe exchanges gained slightly.
Binance market share dropped from 40.4% in July 2023 to 31.2% in June 2024 marking a 9.16% decrease.
Bybit on the other hand increased its market share by 2.01% to 8%. Additionally, Singapore-based BitGet and HTX saw gains of 1.74% and 1.43%, respectively.
The drop in trading activity in June can also be attributed to the high trading activity giving the approval of 19B-4 forms for eight spot Ethereum ETF issuers that month. The news of the approval caused a surging in trading activity which has since cooled off in June.
Finally, the report highlighted that BTC options trading volume declined by 28.2% to $1.50 billion in June, while ETH options trading volume experienced the largest decline, dropping by 58.0% to $408 million.
What to Know
- Derivatives trading is when you buy or sell a derivative contract for the purposes of speculation. Because a derivative contract ‘derives’ its value from an underlying market, they enable you to trade on the price movements of that market without you needing to purchase the asset. Example of such asset includes physical gold or Bitcoin.
- Cryptocurrency futures trading are contracts between two investors who bet on a cryptocurrency’s future price, giving them exposure to cryptocurrencies without purchasing them.
