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Cryptocurrency trading volume plunges as interest wanes following bitcoin price drop

  • Trading volumes at the largest exchanges, including Coinbase, Kraken, Binance and Bitstamp, fell more than 40% in June, according to CryptoCompare
  • In June the price of bitcoin hit a monthly low of $28,908; a daily volume maximum of $138.2 billion was down 42.3% from the intra-month high in May.

Art at the cryptocurrency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami on June 4, 2021.Marco Bello | AFP | Getty Images

Cryptocurrencies are in a summer slump as they navigate a two-month correction period following a string of negative stories.

Trading volumes at the largest exchanges, including Coinbase, Kraken, Binance and Bitstamp, fell more than 40% in June, according to data from crypto market data provider CryptoCompare, which cited lower prices and lower volatility as the reason for the drop.

In June the price of bitcoin hit a monthly low of $28,908, according to the report, and ended the month down 6%. A daily volume maximum of $138.2 billion on June 22 was down 42.3% from the intra-month high in May.

The report pointed to China as a major catalyst, according to Reuters, which reported on it earlier Monday. China's latest of many efforts over the years to crack down on the industry have had a greater impact than ever before. Investors and experts in the cryptocurrency ecosystem still see a long-term positive trend for bitcoin and other cryptocurrencies, however.

"The Chinese crackdown has caused a lot of fear, which is showing up in markets," said Teddy Vallee, chief investment officer at Pervalle Global. "The digital asset ecosystem got punched in the face, so it's currently up against the ropes versus fighting in the middle of the ring. Typically when you have large sell-offs, participants are quite fearful and pull back their chips."

Vallee added that he still isn't seeing large flows back off exchanges, funding rates are still negative, the number of new wallets is lower.

Factors behind the slowdown

At the end of June, China ordered a halt to cryptocurrency as it prepares to launch its own state-backed digital currency. That shuttered mining operations across various provinces that had hosted 50% to 60% of all of bitcoin’s mining power.

Gabor Gurbacs, director of digital assets strategy at VanEck, noted that as miners left China, they weren’t transacting as much with the bitcoin they’ve mined.

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