- July witnessed a significant 12% dip in total spot and derivatives trading volumes to $2.36 trillion, marking the lowest for any month in 2023.
- While Binance’s market dominance continues to wane for the fifth consecutive month, Upbit, a Korean-based exchange, experienced an impressive growth in its market share.
The generally volatile landscape of cryptocurrencies saw an unanticipated stagnation in July, putting a damper on both bullish and bearish spirits. Notably, the two leading cryptos by market cap, Bitcoin [BTC] and Ethereum [ETH], have maintained their June gains with minimal price fluctuations.
A Drastic Dip in Trading Volumes
The subdued crypto landscape has been corroborated by on-chain research firm Glassnode, which reports a plunge in the 30-day realized volatility to a three-year low. This stagnant market has taken a significant toll on the trading volumes across Centralized Exchanges (CEXs). A report by CCData, a digital assets data provider, reveals a 12% slump in the combined spot and derivatives trading volumes in July, amounting to $2.36 trillion, the lowest monthly volume in 2023.
The situation has also reflected on spot trading volumes, which refers to the buying and selling of assets at their current market prices. The absence of a strong bullish or bearish momentum led to a 10% drop in spot trading volumes to $515 billion in July, marking the second lowest monthly volume for 2023 after March.
Binance’s Waning Dominance, Upbit’s Surge
A key factor contributing to the downturn in trading volumes is the decline in top-tier trading platforms’ performance. Particularly noteworthy is Binance, the world’s largest crypto exchange, which saw its market share fall for the fifth month consecutively. This ongoing downturn, underlined by the barrage of regulatory onslaughts faced in 2023, leaves Binance’s spot trading market dominance just above 40%, its lowest since August 2022.
In contrast, July saw an increase in market share for Coinbase, the largest U.S. exchange, despite a 5.75% dip in volumes to $29 billion. However, the real success story has been Upbit, a Korean-based exchange that has seen its spot trading volume spike by 42.3% to nearly $30 billion in July, surpassing Coinbase to become the second-largest exchange by monthly volumes. Consequently, Upbit gained the largest increase in market share among all exchanges, marking a dominance of 5.78%.
Impact on Derivatives Market
The derivative market, which forms the bulk of all crypto trading, didn’t escape the impact of the market lull. The volume plunged 12.7% to $1.85 trillion in July, resulting in a slight decline of the derivative market’s share to 78.2%. The largest derivatives exchange, Binance, recorded a significant 12.25% drop in monthly volume for July.
At the time of writing, the aggregated market cap for all crypto assets fell 3.3% in July, with BTC and ETH trading at $29,150 and $1,831 respectively according to CoinMarketCap.