Despite bear markets, crypto exchanges did enjoy success in 2018 making it as a record year. While 2019 is anticipated to bring fortunes back to cryptos, the exchanges have started the new year with some nervousness as the trading volumes have begun to collapse. While Binance’s Bitcoin/USD volumes slashed by around 40%, Gemini and Coinbase also have reported some sluggishness.
Is the popularity of crypto trading decreasing?
According to the recent report released by Diar research, Cryptocurrency exchanges have begun 2019 on a slumber note as trading volumes of nearly all major exchanges have hit new lows in January, which was something that was not seen since 2017. One of the first reason that comes to the mind for this drop-in volume is the lack of volatility so far this year, which has kept traders away, who enjoyed making quick bucks riding the huge price movements. If this continues, exchanges could soon hit a new plateau after coming from the record-breaking year of 2018.
While the plateauing of growth is seen across exchanges, Binance draws special attention where the trading volumes of the most popular Bitcoin/USD market saw a dip of by over 40% versus December-18, marking the worst period for Binance since its inception in 2017.
While Binance definitely seemed off-guard, Coinbase’s Bitcoin/USD markets also saw a drop-in volume tanking it below the May 2017 volumes. The same has been the case with Winklevoss promoted Gemini exchange whose trading volumes have been pretty stagnant over past 2 months and OKEx which has lost its 3-month growth streak in January 2019.
While the numbers look weak for January 2019, one has to keep in mind that these numbers are in following some stellar months for all the crypto exchanges. Volumes on Binance’s Bitcoin dollar-pegged markets accounts for the year of 2018, were just shy of 50% of the total on the largest exchange. Same was the story for other exchanges as well, Coinbase BTC/USD markets accounted for 46%, slightly down from 2017 when it stood at 48%. Combined with Ethereum markets, however, the two majors accounted for 75% of total trades two years straight. US Dollar markets hit over $83Bn in trading volume for Coinbase last year, up from $67Bn in 2017.
While the growth in volumes looks slightly off the radar this month, the numbers are still big enough to conclude that there is any kind of sluggishness in the market. Drop in volumes could also be an indicator that people are not just trading cryptos for some quick bucks and are turning investors and holding their assets for long term appreciation.
Why do you think are these crypto trading volumes falling? Do let us know your views on the same.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.