Trading on Crypto Exchanges Fell for First Time in Seven Months

(Bloomberg) — Trading volume on major crypto exchanges fell in April over the past seven months, while market bellwether Bitcoin retreated from record highs.

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Spot trading volume on so-called centralized exchanges such as Coinbase Global, Binance and Kraken fell 32.6% last month to $2 trillion, according to data from researcher CCData. Derivative transaction volume also decreased for the first time in seven months, falling 26.1% to $4.57 trillion.

While trading volume soared early in the year as US exchange-traded funds invested in Bitcoin, it has slowed as financial conditions have tightened in the US, where the Federal Reserve faces the challenge of tackling sticky inflation. The April 19 Bitcoin halving, in which the supply of new coins minted on the network dropped by half, was previously a catalyst for market excitement.

“Consistent with patterns observed over the last two cycles, trading activity on centralized exchanges generally slows in the two months following the Bitcoin halving event,” said Jacob Joseph, research analyst at CCData. “In addition, higher than expected CPI inflation data and increased geopolitical tension in the Middle East created some uncertainty and fear in the market. “This coincides with negative net flows from spot Bitcoin ETFs, pushing prices of major crypto assets to rock-bottom lows.”

As volumes fell, spot market share of Binance, the world’s largest crypto exchange, fell for the first time since September 2023. The stock fell almost 4% to 33.8%. This rate was the stock exchange’s lowest spot market share since January. CCData.

CME Group also saw its first crypto trading volume decline in seven months. According to CCData, derivative trading volume in April fell nearly 20% to $124 billion.

“Despite this, although trading activity on central exchanges has slowed compared to the peak in March, it remains at a high level compared to volumes recorded in other months,” Joseph said.

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