In June, the trading volume on centralized exchanges experienced a significant decline of 21.8%, marking the third consecutive month of diminishing activity. This decline was primarily attributed to a notable decrease in open interest on derivatives exchanges. The open interest on derivatives exchanges fell by 9.67% to $47.11 billion, with Coinbase alone experiencing a 52.1% drop to $18.2 million. This decrease in open interest was a result of liquidations triggered by a drop in cryptocurrency prices throughout June and into July.
Several external factors contributed to the selling pressures experienced in the market. These included the aftermath of Mt. Gox repayments and Bitcoin sales by the German government. The futures market on the Chicago Mercantile Exchange (CME), the world’s largest institutional derivatives exchange, also saw a decline in trading volume. Bitcoin futures trading volume dropped by 11.5%, while Ethereum futures fell by 15.8%, reflecting decreased interest in futures contracts for major cryptocurrencies.
Over the past six months, there have been notable shifts in market share among decentralized exchanges. Dubai-based exchange Bybit increased its market share by 2.01% to reach 8%, while Singapore-based BitGet and HTX saw gains of 1.74% and 1.43% respectively. On the other hand, Binance saw its market share decline from 40.4% to 31.2%, marking a decrease of 9.16%. These shifts in market share reflect changes in trading preferences among cryptocurrency traders.
Despite the decline in trading volume, the average funding rates across the analyzed exchanges stabilized somewhat, rebounding from the negative rates observed in the previous month. This stabilization indicates a level of resilience in the market, with traders adjusting to the changing conditions. BTC options trading volume declined by 28.2% to $1.50 billion, while ETH options trading volume plummeted by 58.0% to $408 million. This decline was primarily attributed to increased activity in options trading, driven by the SEC’s approval of spot Ether ETFs in May.
The decline in trading volume on centralized exchanges in June was influenced by a combination of factors, including falling open interest, liquidations, external selling pressures, and shifts in market share. Despite these challenges, the market has shown resilience with the stabilization of funding rates. Traders will need to adapt to the changing landscape of the cryptocurrency market to navigate future uncertainties.
