Crypto spot trading volume hits 2021 low despite price rise in July

  • For the month, world’s two biggest cryptocurrencies bitcoin and ethereum rose 18.3% and 11.2%, respectively on a month-on-month (MoM) basis

Livemint
Updated5 Aug 2021, 07:23 PM IST
The continuous fall in crypto trading during July could be attributed to the regulatory concerns surrounding different areas of the cryptocurrency markets.
The continuous fall in crypto trading during July could be attributed to the regulatory concerns surrounding different areas of the cryptocurrency markets.(REUTERS)

Despite July being a positive month for the cryptocurrency markets, spot trading volumes plummeted 31.5% sequentially to $1.9 trillion, the lowest levels recorded so far this year, according to a report by data provider CryptoCompare.

For the month, world’s two biggest cryptocurrencies bitcoin and ethereum rose 18.3% and 11.2% respectively on a month-on-month (MoM) basis.

During June, China’s persistent crackdown on bitcoin mining in the country took a heavy toll on the crypto market with prices of the world’s biggest cryptocurrency falling 6% and spot volumes slumping 42.7% during the month.

The continuous fall in crypto trading during July could be attributed to the regulatory concerns surrounding different areas of the cryptocurrency markets.

“For example, exchanges such as Binance have seen increased scrutiny from regulators across the globe. Similarly, stablecoins have also received criticism from regulators regarding potential risks to consumers and the global financial system,” CryptoCompare said in a release.

During July, derivatives trading gained market share over the spot market despite the fall in volume.

Derivatives volumes reached 56.9% of total volume in cryptocurrency markets, the highest level since November 2020 when derivative volumes took 59.2% of the market share.

“This was after a 22.6% decrease in derivatives volume in July, to $2.5tn. Spot volumes fell to a greater extent, recording a 31.5% fall MoM to $1.9tn, the lowest spot volumes recorded so far this year,” the report said.

In terms of exchange-wise breakup, Binance was the largest top-tier spot exchange by volume in July, trading $455 billion (down 31.9%). This was followed by OKEx trading $96.8 billion (down 31.4%), and Huobi Global trading $92.7 billion (down 42.7%).

BeQuant, Coinbase and FTX followed with $72.1 billion (down 6.5%), $5.38 billion (down 30.5%) and $35.2 billion (down 12.2%), respectively.

Meanwhile, the report noted that derivatives volumes decreased by 22.6% in July to $2.5 trillion. The derivatives market now represents 56.9% of the total crypto market (vs 52.9% in June).

Binance lead the derivative markets with 55.0% ($1.4 trillion) of total volumes in the month of July. This was followed by OKEx (14.9% market share, $368 billion) and Bybit (11.6% market share, $285 billion).

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First Published:5 Aug 2021, 07:23 PM IST
HomeMarketsCryptocurrencyCrypto spot trading volume hits 2021 low despite price rise in July

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