Despite the recent increase in the ETF-induced rally, there has been a drop in spot crypto exchange volumes.
Spot Exchange Volumes Dropped
The seven-day moving average of daily crypto exchange volumes dropped from a peak of $19.4 billion on June 27 to $14.2 billion on July 8. As of Friday, the volume was just over $15 billion.
Over the same period, the Bitcoin price has remained relatively stable. This slowdown in spot exchange crypto trading activity indicates a potential shift in trading towards derivatives or non-exchange platforms.
The filing of a spot Bitcoin ETF on June 15 by BlackRock resulted in an over 18% appreciation in Bitcoin price.
On the other hand, the Bitcoin futures market on the Chicago Mercantile Exchange (CME) has witnessed a surge in open interest, reaching $2.7 billion at the time of writing. This increase indicates that participation in the futures market has increased.
Despite Bitcoin's positive price performance, the drop in spot crypto exchange volumes raises the possibility that market participants are diversifying their trading strategies.
While spot trading remains an important aspect of the crypto market, the growing interest in derivatives and other over-the-counter platforms points to a thriving landscape for cryptocurrency trading.
It is not yet clear whether this downward trend in spot exchange volumes will continue or whether market participants will eventually return to spot trading.
The launch of a spot Bitcoin ETF and the continued growth of the futures market will shape the future dynamics of the crypto market.
As the crypto industry continues to mature, market participants will closely monitor these shifts in trading patterns and adjust their strategies accordingly.
*Not investment advice.
