Key Points
- Crypto trading volumes fell by 20% in May, marking the second consecutive monthly drop.
- Despite the decline, derivatives dominated the crypto market at over 70% due to speculation around Ethereum ETFs.
The usual summer financial slowdown seems to be impacting the crypto markets.
In May, crypto trading activity experienced a 20% decrease, making it the second consecutive month of declining trading volumes on major exchanges, according to a CCData report.
A Downtrend in Crypto Trading Volume
The report highlighted a 21.6% drop to $1.57 trillion in May’s trading volumes across centralized exchanges in the spot market segment. This is a decrease from the over $2 trillion volumes recorded in April.
Binance led the spot market trading volume in May with $545 trillion. Other exchanges that followed include Bybit, OKX, Coinbase, and Gate.io. However, each exchange experienced significant drops in trading volumes in May compared to April.
In terms of year-to-date performance on the spot market share, Binance recorded the most significant gains, increasing its dominance to 34.6%. Other exchanges like Bybit, Bitget, and XT.com also saw a surge in market share over the same period. Conversely, Coinbase experienced a modest decline while Upbit, OKX, and MEXC Global recorded the most significant decreases in market share.
Derivative Market Dominance Surges to 70%
Despite the downtrend, the majority of the money in the crypto market was in the derivatives market, which now represents 70.1% of the entire crypto market. However, overall trading volumes were also subdued in the derivatives market, decreasing by 19.4% in May to $3.69 trillion. This marks the second consecutive monthly decline in derivatives volume.
Contrary to the typical summer slowdown in traditional finance, the report attributed the low volumes to historical patterns of low activity following Bitcoin halving events.
Despite the lull, traders remained optimistic, as evidenced by an increase in funding rates and a surge in Ethereum [ETH] option volumes due to speculation on US ETH ETFs.
