thecoinrepublic.com
Looks like it’s not just Bitcoin (BTC) that’s having a bad day. Cryptocurrency trading itself is also having one of those days as volumes have significantly slumped last month.
The drop was very much noticeable if the information gathered by crypto tracker CryptoCompare is anything to go by. Per the data collected, trading plummeted to at least 40 percent. It was revealed that spot volumes were hit the hardest as users trading is said to be 42.7 percent lesser in comparison to the ones in May. The report went to note that a total of $2.7 trillion got traded in June.
Another trading avenue – derivatives trading – also experienced that same fate. Bitcoin.com noted that this fell 40.7 percent which translates to $3.2 trillion month-to-month.
Financial pundits said that these steep declines – which are said to be the lowest in nine months – can be traced all the way down to June’s crypto clampdown by our good friends over in China. This made traders doubtful about the market’s future which triggered the above-mentioned cryptocurrency dip.
In line with this, CryptoCompare stated that headwinds kept going as the authoritarian state stood firm with its stance in its bitcoin mining clampdown. A decline in spot volumes then ensued as this is the result of both volatility and low prices.
Another reason why cryptocurrency trading volumes are hitting new lows as of late is the fast outflows in Europe. Lawmakers have buffed their probe on cryptocurrency trading. Albeit the scrutiny of European regulators, U.S. investors kept on buying.
Inflows in the U.S. and bitcoin
On July 5, CoinShare rolled out their weekly report revealing that for the first time in five weeks, digital asset investment products have experienced inflows amounting to $63 million on that previous week. Another first in nine weeks, inflows were also spotted “across all individual digital assets” which according to the report is suggestive of a turnaround in sentiment among investors.
CoinShare’s report also noted that bitcoin too saw the most inflows with a total of $39 million. However, despite the fact that there were inflows on that week, BTC’s investment product trading turnover was said to be the lowest since 2020. Moreover, the same observation was also seen with the entirety of the digital currency’s ecosystem as the volumes went down by 38 percent relative to 2021’s average.
Web traffic on exchanges also fell
The Block, on the other hand, did a research on the internet traffic to exchanges and this too fell quite hard. It was learned that last month, it dropped 42.2 percent month-to-month as these exchanges only got 369.1 million visits. In line with this, the cryptocurrency exchange firm Binance endured more as the trading volume went on a 56 percent nosedive. It managed to hold on to the top post in spot trading volumes, however.
Analysts believe that there are other reasons as to why customers are veering away from Binance. The most probable catalyst for such a decline is the falling prices of bitcoin, which in turn affects the cryptocurrency market. The crypto community is very much well-aware of what happened where bitcoin skyrocketed to $60K back in April. Currently, BTC’s price hovers over the $30K zone and there were times that it goes further down the $20K mark. With that in mind, analysts are calling it right now that this decline (in bitcoin) will continue.