Bitcoin Futures Trading Volume Drops 11.5% Amid Continuing Decline on Centralized Exchanges

• Cryptocurrency exchanges experienced a significant decline in trading volume throughout June.
• The reductions marked the third consecutive month of decreased activity, highlighting a notable trend in the market.
• The combined spot and derivatives trading volume in June was $4.2 trillion, a steep drop from the $9 trillion recorded in March.

Discover the latest trends in cryptocurrency trading volume with our comprehensive report on market dynamics and exchange performance.

Decline in Centralized Exchange Trading Volume

In June 2024, centralized cryptocurrency exchanges experienced a substantial decline in trading volume, which fell by 21.8%. This reduction marked the third consecutive month of decreasing activity, beginning in March. According to a recent report from CCData on July 17, the total spot and derivatives trading volume across these exchanges amounted to $4.2 trillion, a significant drop from the $9 trillion peak seen in March.

Factors Contributing to Decreased Trading Activity

Several elements have been identified as key contributors to the declining trading volumes. One primary reason is the considerable reduction in open interest (OI) on derivatives exchanges. In June, the OI on these exchanges fell by 9.67% to $47.11 billion. This downward trend persisted into July, with Coinbase notably experiencing a dramatic 52.1% decrease in open interest, down to $18.2 million.

Impact of Liquidations and Market Sentiments

The decline in open interest was largely driven by a series of liquidations prompted by falling cryptocurrency prices. Various factors, including the ripple effects from Mt. Gox repayments and Bitcoin sales by the German government, contributed to heightened selling pressure. This chain of events led to reduced market confidence and subsequently diminished trading volumes.

Chicago Mercantile Exchange Performance

The Chicago Mercantile Exchange (CME), known as the foremost institutional derivatives exchange, also observed a decline in trading activity. Following a successful performance in May, trading volumes on the CME fell by 11.5% to $103 billion in June. This change mirrored the overall trend of reduced interest in futures contracts for major cryptocurrencies, including Bitcoin and Ethereum. Specifically, Bitcoin futures trading volume declined by 11.5%, while Ethereum futures saw a 15.8% drop.

Market Share Shifts Among Exchanges

While some exchanges experienced declines, others saw gains. For example, Bybit, a Dubai-based exchange, increased its market share by 2.01% to 8% over the past six months. Similarly, Singapore-based BitGet and HTX recorded market share gains of 1.74% and 1.43%, respectively. In contrast, Binance witnessed a significant decline in its market share, dropping from 40.4% in July 2023 to 31.2% in June 2024, marking a reduction of 9.16%. Despite this, funding rates across the analyzed exchanges showed signs of stabilization, recovering from the negative rates seen in the prior month.

Options Trading Volume Insights

June also saw decreased trading volumes in the options market. BTC options trading volume fell by 28.2% to $1.50 billion. ETH options experienced a more substantial decline, plummeting by 58.0% to $408 million. This trend can be attributed to the increased activity in options trading following the SEC’s approval of spot Ether ETFs in May. The anticipation surrounding the launch of eight spot Ether ETFs on July 23 likely influenced the market dynamics as well.

Conclusion

The declines in trading volumes across centralized cryptocurrency exchanges indicate a cautious market sentiment influenced by various factors, including liquidations and regulatory developments. While certain platforms have successfully increased their market share, the overall trend suggests a period of adjustment and potential stabilization. Market participants will be closely monitoring upcoming ETF launches and other regulatory changes to gauge their future impact on trading volumes and market behavior.