Centralized cryptocurrency exchanges experienced a significant increase in trading activity for the second consecutive month in August, with total spot and derivatives trading volumes reaching $5.22 trillion, a 5.38% growth. The rise in trading volume was attributed to heightened market volatility caused by the unwinding of the Japanese Yen carry trade, resulting in selling pressure across traditional financial markets and digital assets. Spot trading surged by 7.06% to $1.54 trillion, the highest level since May, while derivatives trading volumes also saw an increase of 4.70% to $3.68 trillion, the highest since May.
Despite the overall increase in trading volume, August’s price downturn led to a wave of liquidations, with open interest across derivatives exchanges falling by 15.7% to $45.8 billion. Crypto.com experienced the largest growth in market share, with its spot trading volume surging by over 38% to $95.6 billion, its highest level since 2022. Additionally, its derivatives trading volume reached an all-time high of $104 billion. Coinbase International also reported strong gains, with derivatives trading volume increasing by 106% to $58.2 billion. However, derivatives trading on the Chicago Mercantile Exchange (CME) saw a slight decline, particularly in Ethereum futures and options trading volumes.
On the other hand, crypto funds globally continue to face challenges, with spot Bitcoin ETFs in the U.S. recording six consecutive days of net outflows, totaling $37.29 million on Wednesday. Grayscale’s GBTC, the second-largest spot Bitcoin ETF, experienced the largest outflows at $34.25 million, while other funds also saw significant withdrawals. U.S. Ethereum ETFs also faced outflows, with the Grayscale Ethereum Trust (ETHE) recording net outflows of $40.63 million. The decline in trading volume across nine Ethereum ETFs reflects a general negative sentiment in the crypto market, driven by stronger-than-expected economic data from the U.S. reducing the likelihood of a 50-basis point interest rate cut by the Federal Reserve.
Digital asset investment products saw significant outflows last week, with a total of $305 million exiting the market as a result of the negative sentiment prevailing in the cryptocurrency market worldwide. Bitcoin has been at the center of this exodus, experiencing outflows totaling $319 million. However, short Bitcoin investment products, which benefit from declines in Bitcoin’s price, saw their second consecutive week of inflows, amounting to $4.4 million. The increase in trading activity on centralized exchanges and the challenges faced by crypto funds globally highlight the volatile nature of the cryptocurrency market, influenced by various factors including market volatility, economic data, and investor sentiment.
