Analysts flag drop in exchange turnover to 2020 levels

The total trading volume on cryptocurrency exchanges for April–June fell to its lowest level since Q4 2020. Such assessments came from Kaiko.

As one factor contributing to the slowdown, experts cited Binance’s reintroduction of fees for its most liquid Bitcoin pairs. As a result, the platform’s trading turnover collapsed by 70%. The declines at Coinbase, Kraken, OKX and Huobi were around 50%, according to analysts.

Against a backdrop of cooling overall activity in the sector, feverish activity was observed on Korea-based platforms. By Kaiko’s estimates, by the end of June total daily turnover here surpassed $4 billion. Meanwhile, 90% of activity was concentrated in altcoins, led by Waves and Bitcoin Cash.

The euro-denominated trading turnover of digital assets tracked the global trend. The biggest decline occurred on Binance — its market share fell from more than 40% at the start of 2023 to 16% in June.

The platform announced the termination of cooperation with Paysafe, which, in the absence of alternatives, will lead to the impossibility of depositing and withdrawing euros starting in September.

Binance’s difficulties led to Kraken securing a leadership position in the region — the exchange’s market share rose from 45% in January to 60% in June. In April, the platform obtained a license as a VASP in Ireland.

Trading volume of Bitcoin options in June reached a maximum since March ($22 billion). This was aided by the expiration of a quarterly contract with the largest open interest (OI). Almost two-thirds of trading activity was in call options.

Fund inflows into Bitcoin derivatives markets accelerated in the second half of June amid BlackRock’s filing for a Bitcoin ETF. Open interest on perpetual futures across the five largest platforms in Q2 rose 12%, to $8 billion, surpassing the June 2022 peak.

Open interest on similar altcoin-based instruments from June 9 to 14 fell by 40% and by month-end remained near multi-year lows.

The total for eight altcoins that gained securities status in the suit by the U.S. Securities and Exchange Commission against Coinbase — ADA, SOL, MATIC, FIL, SAND, MANA, ALGO and AXS — fell 30% in Q2, to $480 million.

Bitcoin price correlations with traditional assets have undergone significant adjustments amid regulatory changes.

The historically negative BTC/USD correlation softened markedly from -60% at the start of the year to -10% in June. The statistical relationship between digital gold and US investment-grade bonds slipped toward around zero (it stood at 30% in January). Bitcoin’s correlation with commodities rose, but the figure remains at historically low levels (~20%).

In April, Eight founder Michael van de Poppe said that a Bitcoin bull market had begun.

Earlier, MicroStrategy founder Michael Saylor predicted a multi-fold rise in digital gold thanks to regulation. In his view, the driver would be the actions of the SEC.