Markets
Cryptocurrency Trading Activity Declines: Centralized Exchanges See 20.1% Drop in May
Total cryptocurrency trading volume on centralized exchanges plunged 20.1% last month to a total of $5.27 trillion, while major cryptocurrencies including Bitcoin and Ethereum remained in a range, with a sudden spike in volatility after the Securities and Exchange Commission approved Ether spot exchange-traded funds in the US.
According to the latest version of CCData Trade Review report, spot trading volumes on centralized exchanges last month fell 21.6% to $1.57 trillion, recording their second consecutive monthly decline in trading activity.
Derivatives trading volumes were also hit, falling 19.4% to $3.69 trillion, a smaller decline that means derivatives market dominance has reached its highest level since December 2023.
Source: CCData
The growth in derivatives market share can be attributed to a surge in interest from traders following the unexpected approval of Ethereum spot ETFs by the SEC, which, as reported by CryptoGlobe, leads to a ETH price rises by more than 20% in a single day. The report suggests that traders have flocked to derivatives markets to take advantage of this regulatory development.
The report adds that open interest on centralized exchanges rose 30.5% to $55.2 billion in May, with the three largest derivatives trading platforms – Binance, OKX and Bitget – seeing increases. of 33.2%, 22.1% and 39.2% respectively.
/2 However, open interest on derivatives exchanges increased 30.5% to $55.2 billion in May.
The three largest derivatives exchanges – Binance, OKX and Bitget – saw their open interest increase by 33.2%, 22.1% and 39.2%, reaching $21.3 billion, $7.26 billion, respectively. of dollars and 9.74 billion dollars. pic.twitter.com/2tyjf5Q8ud
–CCData (@CCData_io) June 5, 2024
On the CME, open interest in Ethereum futures notably increased 59.3% to $1.25 billion, with sentiment for the second-largest cryptocurrency by market cap increasing significantly after the surprise SEC approval of spot Ether ETFs.
That same exchange, following the approval, saw Ethereum options trading volumes hit a new all-time high of $931 million, while ETH futures rose 37.5% to 20 .5 billion in a month in which the CME saw overall derivatives volumes fall. 7.42% to $115 billion.
Notably, open interest in Ethereum instruments in the cryptocurrency space increased by 50.3% to $14 billion, according to the CCData report. Notably, Ethereum whale accumulation has increased, as according to an analyst at cryptocurrency analytics firm CryptoQuant, more than 800,000 ETH worth around $3 billion has been accumulated. removed from centralized cryptocurrency exchanges in a little over a week.
The analyst noted that institutions preparing to begin trading a spot Ethereum ETF in the United States could be behind the centralized exchange outflows in an effort to meet potential investor demand for such a fund.
IntoTheBlock, a cryptocurrency intelligence firm, noted that whale accumulation has intensified recently, with 41% of the supply of the second-largest cryptocurrency now held by addresses representing more than 1% of its total supply in circulation, compared to 36% at the time. beginning of the year.
According to the company, this trend highlights the growing confidence of large holders in ETH.
Featured image via Unsplash.