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Data from research firm CCData showed that spot trading volume on centralized cryptocurrency exchanges (CEX) cooled in April for the first time in seven months, as digital asset prices were affected as the likelihood of a rapid interest rate cut by the Federal Reserve this year decreased. Inflows into U.S.-listed spot Bitcoin slow down (BTC-USD) Exchange Traded Funds.
Specifically, spot market trading volumes on CEXs such as Coinbase (Nasdaq: Coin), Binance and Kraken, fell 32.6% last month to $2.01T, the report said. Similarly, monthly derivatives trading volume fell for the first time in three months, falling 24.1% to $4.57T. CEX’s combined spot and derivatives trading volume fell 26.9% to 6.58 tons.
CCData explained: “The decline was driven by unexpected macroeconomic data, an escalating geopolitical crisis in the Middle East, and negative U.S. spot Bitcoin ETF net flows, causing major crypto assets to give up March gains.”
To be sure, Bitcoin (BTC-USD), the most watched digital token, fell nearly 15% last month to below $60,000, breaking a seven-month winning streak. The drop follows a strong multi-month rally in mid-March to reach all-time highs of over $73,000. At the time, this overheated bull market was largely driven by the recently approved spot ETFs and Bitcoin halving event, as well as speculation about the prospect of rate cuts. Note that cryptocurrency trading activity also hit an all-time high in March.
Binance, which has been plagued by intense regulatory scrutiny, remains the largest cryptocurrency exchange by trading volume, the report said. Its spot and derivatives market share fell by 2.41% to 41.5%, the first decline in three months. Spot market trading volume alone fell 39.2% to $679B.
“Binance’s decline in market share also coincides with the news that its founder and former CEO Changpeng Zhao was sentenced to four months in prison for violating U.S. money laundering laws,” CCData said.
As retail investor interest in digital assets cooled significantly last month, Robinhood Markets’ (NASDAQ:HoodThe company said in its operating report on Wednesday that cryptocurrency trading volume plunged 57% from the previous quarter to $10.1B. However, this is still a 173% increase from the same period last year. Earlier this month, Robinhood reported first-quarter earnings and revenue that beat Wall Street expectations, driven by a surge in cryptocurrency trading in the first three months of 2024.
Chicago Mercantile Exchange (NASDAQ: CMEDerivatives trading volume also declined in April, falling 19.8% to $124B, according to CCData. This is the first decline in seven months. Bitcoin (BTC-USD) futures trading volume on the exchange fell 17.7% to $101B, while Ethereum (ETH-USD) futures trading volume fell 25.9% to $14.9B. The firm noted that the overall decline in activity coincides with “the passing of the Bitcoin halving event, which was an important catalyst for institutional traders.”
