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Spot trading volume on centralized cryptocurrency exchanges (CEXs) cooled for the first time in seven months in April, data from researcher CCData showed, as digital asset prices suffered from a decreasing likelihood of swift interest-rate cuts this year by the Federal Reserve, in addition to slower inflows into U.S.-listed spot bitcoin (BTC-USD) exchange-traded funds.
Specifically, spot market volume on CEXs, such as Coinbase (NASDAQ:COIN), Binance and Kraken, dropped by 32.6% to $2.01T last month, the report said. Likewise, monthly derivatives trading volume saw its first pullback in three months, falling by 24.1% to $4.57T. CEX’s combined spot and derivatives trading volume slumped by 26.9% to $6.58T.
“This decline followed unexpected macroeconomic data, an escalation in the geopolitical crisis in the Middle East, and negative net flows from U.S. spot Bitcoin ETFs, leading major crypto assets retracing the gains they made in March,” CCData explained.
To be sure, bitcoin (BTC-USD), the highest-profile digital token, slid last month by nearly 15% to under $60K, breaking a seven-month winning streak. The decline followed BTC’s strong, multi-month rally to an all-time high of over $73K in mid-March. At the time, this overheated bull run was mostly fueled by speculation around the recently approved spot ETFs and the bitcoin halving event, as well as prospects of rate reductions. Do note that crypto trading activity had reached a record high in March as well.
Binance, which has been plagued by heightened regulatory scrutiny, remained the largest crypto exchange by volume, according to the report. Its combined spot and derivatives market share slipped by 2.41% to 41.5%, marking the first decline in three months. Spot market trading volume alone tumbled 39.2% to $679B.
“The decline in Binance’s market share also coincided with the news that its founder and previous CEO, Changpeng Zhao, was sentenced to four months in prison for the violation of U.S. money laundering laws,” CCData said.
With the appetite for digital assets among retail investors cooling down markedly last month, Robinhood Markets’s (NASDAQ:HOOD) crypto notional trading volumes plunged 57% M/M to $10.1B, it said in a Wednesday operating report. That’s still up 173% from the year-ago period, though. Earlier this month, Robinhood delivered Q1 earnings and revenue that blew past Wall Street expectations, driven by the surge in crypto trading in the first three months of 2024.
The CME (NASDAQ:CME) exchange also experienced a retreat in derivatives trading volume in April, falling 19.8% to $124B, according to CCData. That’s the first decline in seven months. Monthly trading volume for bitcoin (BTC-USD) futures on the exchange declined 17.7% to $101B, while ether (ETH-USD) futures volume dropped 25.9% to $14.9B. The overall slide in activity was accompanied by “the passing of the Bitcoin halving event, an important catalyst for institutional traders,” the firm noted.
