Crypto Trading Volume Reached New Low Point in June According to Report
- Crypto exchanges have suffered the most from the declined market activities.
The month of May was a period most crypto traders would easily want to forget, following Terra’s collapse which sparked a series of other project failures. However, according to a recent report, June wasn’t any better for crypto projects as the trading volumes sunk even lower.
In the midst of the prolonged market slump, crypto spot and derivatives volumes on exchanges decreased by more than 15% to over $4.2 trillion since May, according to statistics gathered by CryptoCompare. This demonstrates the market’s inability to bounce back from the huge decline in the market during the second quarter.
According to Bloomberg, cryptocurrency trade volumes, which are highly correlated with overall industry sentiment, fell over 28% to $1.41 trillion in June, touching its lowest levels since December 2020. The CME Group’s Bitcoin futures contracts only reached $29 billion in June, which is the lowest amount since July 2021. Bitcoin finished the second quarter at its worst state in almost a decade.
The decrease in trading volume has occurred on a variety of platforms, including FTX, OKX, and Binance. The pattern further represents a shift from the previous two years, when retail investors flooded into cryptocurrencies and other high-risk bets while stranded at home during lockdowns in an effort to profit from soaring prices.
Despite the previous declines, things are still far from perfect, as prices are still staggering. Fairlead Strategies co-founder Katie Stockton predicts that the stagnant and low volume would likely last until a market turnaround took place. Katie said,
Volume has declined given the reduced excitement from investors in a cyclical bear market until crypto prices break out of their bear-market cycle, which could take months, we can expect volume to be below average.
There are predictions that prices might continue to slip. For example, the average cost of producing BTC decreased from $24,000 at the beginning of June to $13,000. Bitcoin currently trades at $21,104.38 and has a 24-hour trading volume of $23,337,815,812.
Crypto Exchanges Slumped in June
The sharp downturn in trading volume was mirrored in the diminishing dominance of many top exchanges. Many exchanges saw user engagement decline by huge volumes. For example, Coinbase, a US exchange, saw a sharp decline in activity during the current crypto winter, which caused it to drop from its former position.
According to Bloomberg, Coinbase held a 2.9% average market share among the top 30 in June. This was a 3.6 decrease average in the second quarter and a 5.3% average in the first quarter. According to the popular analyst, Dan Dolev, structural problems in Coinbase’s business model had caused it to suffer from competition with other exchanges.
In response to mounting doubts about whether it was making enough profit, Coinbase decided to reduce its workforce by almost a fifth of its strength. This means the company let go of almost a thousand workers.
Gemini, another popular trading platform announced plans terminate a significant section of its workers due to the pressure from the bear market. According to sources, Gemini laid off about 10% of its workers. Like other companies, Crypto.com decided to lay off about 5% of its staff. The trading firm noted that it took such decisions in a bid to secure its future.
According to experts, many crypto firms and projects face a sad end if the bear market continues and trading volumes continue to decline.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
