- Crypto trading volumes hit a second monthly low after BTC’s halving.
- Derivatives dominated the crypto market by +70% due to ETH ETF speculation.
The typical financial lull that accompanies summer appears to be playing out in the crypto markets.
In May, crypto trading activity fell 20%, marking the second month of a decline in trading volume on the major exchanges, according to a CCData report.
Part of the report singled out the ‘rangebound’ market for the trend and read:
“In May, combined spot and derivatives trading volume on centralized exchanges fell 20.1% to $5.27 trillion as prices of major digital assets continued to rise within a range following Bitcoin’s halving in March.”
A downward trend in crypto trading volume
Source: CCData
The report noted that in the spot market segment, May trading volumes on the centralized exchanges fell 21.6% to $1.57 trillion, down from +$2 trillion volumes in April.
Based on individual exchanges, Binance was the top spot market trading volume contender with a trading volume of $545 trillion in May. In descending order, other exchanges that followed Binance’s lead were Bybit, OKX, Coinbase and Gate.io.
However, every exchange recorded significant declines in trading volumes in May compared to April.
In terms of spot market share to date, Binance saw the biggest gains and increased its dominance to 34.6%.
Bybit, Bitget and XT.com also increased in market share during the same period. But Coinbase saw a modest decline, while Upbit, OKX and MEXC Global “recorded the largest declines in market share.”
Dominance on the derivatives market rises to 70%
However, the money in the crypto market was mainly concentrated on the derivatives market. According to the report,
“The derivatives market now represents 70.1% of the entire crypto market (compared to 69.5% in April).”
Source: CCData
Despite the peak in dominance in the derivatives markets, overall trading volumes were moderate, as in the spot market. The report noted that,
‘Derivatives volumes fell 19.4% to $3.69 trillion in May, recording the second consecutive decline in monthly derivatives volume.’
In contrast to the typically slow financial activity in TradFi over the summer, the report attributed the low volumes to historical patterns associated with low activity following the Bitcoin halving.
Amid the lull, the report noted that traders were still bullish, based on a rise in financing rates and a sharp rise in interest rates. Ethereum [ETH] option volumes on speculation in US ETH ETFs.
‘Across the four exchanges analyzed, the average funding rate continued to decline, to 3.23%. However, the funding rate began to rise on May 23 as traders turned bullish following the SEC’s surprise change of pace on the Spot Ethereum ETF filings.”