During May 2024, the trading volume on centralized crypto exchanges dropped to $5.27 trillion, indicating a 20.1% decline from the previous month. This downward trend aligns with Bitcoin’s subdued price movement following the April Halving event.
Insights into Crypto Exchange Landscape and Institutional Participation
Reports from CCData show that both spot and derivatives markets experienced a significant slowdown. Spot trading decreased by 21.6% to $1.57 trillion, while derivatives trading saw a milder decline of 19.4%, totaling $3.69 trillion.
Despite the overall decrease, derivatives trading gained a larger market share due to the unexpected SEC endorsement of spot Ethereum ETFs, leading to a 50.3% surge in Ethereum derivative instruments’ open interest to $14.0 billion.
Market share in the spot market was dominated by Bybit, reaching a record-high of 7.36%, while Binance maintained its lead with a 34.6% share. In the derivatives sector, Binance expanded its dominance to 45.4%, with OKX and Bitget also holding significant portions.
US CME exchange showed varied results, with a decline in overall derivatives volume but soaring ETH futures and options reaching record levels, indicating growing institutional interest following regulatory developments.
The market responded to regulatory changes, specifically the SEC’s approval of spot Ethereum ETFs, leading to a temporary increase in trading activity. Bitrabo’s report from CryptoQuant revealed that such approvals often prompt speculative trading, resulting in major outflows from exchanges like Coinbase and Kraken.
Continued Outflows Reflect Positive Market Sentiment
Recent data analysis indicates substantial Bitcoin outflows from Coinbase, pointing to potential large-scale acquisitions. The ‘exchange outflow’ metric, indicating assets withdrawn for long-term holding, suggests a strong bullish sentiment among investors.
This trend is not exclusive to Coinbase, as Kraken has also witnessed significant outflows, recording the highest movement of Bitcoin and Ethereum since 2017.
These movements indicate a market shift where large holders are moving towards securing assets for the long term, signaling optimism for future price appreciation and reflecting confidence in the lasting value of cryptocurrencies.
