CRV Trading Volumes Plummet by 97% Following July Hack: What’s Next for Curve Finance?

In the fast-paced world of cryptocurrencies, trading volumes can be a vital barometer of an asset’s health and investor sentiment. The recent nosedive in trading volumes associated with CRV, the governance token of Curve Finance, is sending shockwaves through the crypto community. Just two months after a high-profile hack in late July 2023, CRV’s trading volume has plummeted by a staggering 97%, leaving investors and analysts alike wondering about the future of this decentralized exchange (DEX) token.

From $300 Million to $7 Million: The Drastic Decline

Data from Kaiko, a prominent crypto data provider, reveals that CRV’s trading volume on centralized exchanges, particularly Binance, has taken a severe hit. In late July, CRV was seeing trading volumes close to $300 million. However, as of September 12, 2023, that number had shrunk to a mere $7 million. This sharp decline is a red flag for many investors and crypto enthusiasts.

CRV has been available for trading on a variety of platforms, both centralized and decentralized, including Binance, Uniswap, and Curve itself. Yet, due to its popularity and liquidity, Binance had become the go-to exchange for CRV trading. At the time of writing, Binance still holds a substantial share of CRV trading at approximately 20%, with Bitbox following at around 7%.

The Implications of Falling Trading Volumes

In the world of cryptocurrencies, a significant drop in trading volume often signifies waning interest or a sense of caution among investors. As trading volumes decrease, the asset’s liquidity is compromised. Investors may choose to exit their positions, sometimes opting for more stable assets or adopting a wait-and-see approach to assess how the token reacts to changing market conditions.

The decline in CRV’s trading volume is particularly concerning given its close association with Curve Finance, a major player in the decentralized finance (DeFi) scene. The total value locked (TVL) in Curve Finance, according to DeFiLlama, now stands at approximately $2.163 billion, down from $3.25 billion before the July hack. This decline in TVL, coupled with the dramatic reduction in trading volumes, paints a gloomy picture for CRV.

Source: DeFiLlama

At the time of writing, CRV is trading at $0,4, down 4% in 24 hours, according to Coingecko data.

The July hack that shook the crypto world saw the Curve protocol lose over $50 million worth of assets. While Curve was able to recover most of these funds, the incident raised questions about the overall security of DeFi protocols. Investors and traders have become more cautious, and this cautious sentiment is clearly reflected in CRV’s trading volumes and Curve Finance’s TVL.

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