- Crypto exchanges have recorded a 12% drop in combined spot and derivatives trading volume, which now stands at $2.6 trillion – the second-lowest volume since 2021.
- Despite the overall fall, certain niche sectors like options trading on CME have seen an uptick, indicating a potential increase in institutional interest in the crypto market.
In an environment where market excitement seems to be ebbing, a significant downturn in the trading volumes across centralized cryptocurrency exchanges has been reported. The combined volume of spot and derivatives trading has plummeted by 12%, reaching a low of $2.6 trillion, according to recent research by CCData. This represents the second-lowest combined volume on centralized exchanges since December 2020, a striking demonstration of the current market conditions.
Trading Volume Breakdown
Breaking down this overall decline, spot trading volumes saw a contraction of 10.5%, dwindling to $515 billion, an ebb not witnessed since March 2019. Concurrently, derivatives volumes deflated by 12.7%, hitting a low of $1.85 trillion, which is the second-lowest volume since December 2020.
In tandem with this downturn, the BTC Volatility Index has been recorded around its lowest point since 2021. This index provides a measure of the expected volatility of the prominent cryptocurrency over the next 30 days, with the current index value suggesting that traders expect this tranquil period to continue.
However, not all indicators point towards a universal decline. Intriguingly, even as the futures volume declined on CME, the options trading sector experienced an uptick. Specifically, the volume in this sector on the exchange grew by 24% to $940 million, marking the first increase in four months. The BTC options traded on the exchange increased by 16.6%, while ETH options saw trading volumes rise by a whopping 60%.
This surge in options trading may reflect an adaptive strategy by institutions in the face of market uncertainty, utilizing options as a tool for hedging their positions. Simultaneously, this rise may also signify an uptick in institutional interest in the market, offering a sliver of optimism amidst an overall market contraction.