Cryptocurrency Trading Volume Rebounds After 3-Month Slump, Reflecting Bitcoin ETF Optimism

In a significant development, the trading volume of cryptocurrencies experienced a month-on-month increase for the first time in three months. This surge in trading activity reflects growing expectations surrounding the application for Bitcoin spot ETFs by major asset managers, including BlackRock. However, despite this positive development, the overall trading performance in the cryptocurrency market remains lackluster compared to previous periods.

According to data compiled by CC Data, the volume of cryptocurrency spot and derivatives trading on centralized exchanges in June reached an impressive $2.71 trillion, marking a 14% increase from the previous month. This upturn in trading volume breaks the trend of declining volumes observed over the past three months.

Source: CCData

Last month, several renowned financial institutions, such as BlackRock, Invesco, Fidelity, and WisdomTree, took the initiative to apply for bitcoin spot ETFs with the U.S. Securities and Exchange Commission (SEC). These companies submitted their applications through Nasdaq and Cboe, including a ‘watch share’ clause with Coinbase to address concerns related to potential bitcoin price manipulation.

The increase in trading volume is partially attributed to investors’ interest in applying for Bitcoin spot ETFs. Cryptocurrency derivatives trading volume, which accounted for 78.7% of the total trading volume, witnessed a modest decrease from 79.1% in May. This decrease indicates that investors have shifted their focus towards spot accumulation, as they anticipate the launch of Bitcoin spot ETFs.

Despite the positive month-on-month increase, the overall trading activity in the cryptocurrency market remains subdued. CC Data reports that the spot trading volume in the second quarter was the lowest since the fourth quarter of 2019, signaling a general decline in trading enthusiasm. However, the recent surge in trading volume provides a glimmer of hope for market participants, suggesting a potential reversal of the downtrend.

In conclusion, the cryptocurrency market experienced a much-needed boost in trading volume last month, marking the first increase in three months. This upturn can be attributed to major asset managers, including BlackRock, submitting applications for Bitcoin spot ETFs. The shift in focus from derivatives to spot trading suggests that investors are anticipating the launch of these ETFs and are keen on accumulating Bitcoin directly. While the overall trading performance remains sluggish, the recent increase in trading volume offers optimism for the future of the cryptocurrency market.

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