According to recent data, centralized exchanges experienced a significant drop in spot and derivatives trading volume in August, reaching their lowest levels ever recorded. This decline in trading activity can be attributed to various factors, including market volatility, regulatory uncertainties, and increasing competition from decentralized exchanges. Traders and investors are closely monitoring these trends as they navigate the ever-changing landscape of digital asset trading.
Grayscale’s Victory Over SEC Doesn’t Impact Crypto Accumulation in the Spot Market
Grayscale’s recent legal victory against the SEC may seem like a setback for the financial regulator, but it has not led to a significant increase in the accumulation of cryptocurrency assets in the spot market. Despite this landmark win, the spot market’s crypto assets continue to experience a losing streak, according to CCData’s latest report.
Spot Trading Volume Declines in August
The total trading volume for spot trading and derivatives on centralized exchanges experienced an 11.5% decline in August, reaching $2.09 trillion. This represents the lowest monthly trading volume for the year, as per data compiled by the FCA-authorized benchmark administrator.
This drop in trading activity can be attributed to price fluctuations, resulting in the most substantial long liquidation event since the FTX collapse. Furthermore, August’s figure represents the second-lowest combined trading volume on centralized exchanges since October 2020.
The spot trading volume on centralized exchanges has declined for the second consecutive month, dropping by 7.78% to $475 billion. This marks the lowest monthly spot trading volume seen since March 2019.
Daily trading volumes on centralized exchanges hit a low of $5.90 billion on August 26th, reaching their lowest point since February 7th, 2019. These persistently low trading volumes on centralized exchanges have been observed since April this year and are now on par with the sluggish trading activity witnessed during the bear market of 2019.
Despite the decline in trading volumes, Binance remains the largest spot trading platform in the crypto market, with recorded volumes of $183 billion. However, its market share has been on a decline for the past six months, reaching its lowest point since August 2022 at 38.5%.
On the other hand, Huobi has experienced a remarkable increase of 46.5% in trading volumes, reaching $28.9 billion. This defies the general trend and represents Huobi’s second consecutive monthly growth in trading volumes.
Huobi’s market share has climbed to 6.09%, making it the second-largest exchange after Binance. This achievement represents the highest market share Huobi has attained since October 2021.
Derivative Trading Volumes Also Decline
In addition to the decline in spot volumes, derivative trading volumes have also witnessed a 12.5% decrease throughout August, totaling $1.62 trillion. This is the lowest monthly volume for derivatives since December 2022 and the second-lowest level since 2021.
Derivatives now constitute 77.3% of the overall crypto market, down from 78.2% in July. This decrease in market share is driven by market volatility, leading to a significant decline in open interest last month.
Binance retains its position as the largest derivatives exchange by monthly volume, with a total trading volume of $865 billion in August. However, this represents an 18.1% decrease compared to July. OKX and Bybit follow as the second and third-largest derivatives exchanges, with trading volumes of $315 billion and $205 billion, respectively.
Despite Grayscale’s victory over the SEC, the spot market and derivative market volumes continue to decline in the cryptocurrency industry. It remains to be seen how these trends will impact the overall market and the future of crypto trading.