The Impact of Grayscale’s Victory on the Crypto Trading Volume

The Impact of Grayscale’s Victory on the Crypto Trading Volume

Grayscale’s recent victory over the SEC has been hailed as a major setback for the financial regulator. However, despite this win, the crypto industry has not witnessed a significant increase in the accumulation of digital assets in the spot market. In fact, data from CCData’s latest report reveals a continued decline in trading volume for both spot and derivative markets on centralized exchanges in August. This article examines the reasons behind this decline and explores the shifting landscape of the cryptocurrency trading market.

Decline in Trading Activity

The total trading volume for spot and derivatives on centralized exchanges experienced an 11.5% decline in August, reaching $2.09 trillion. This marked the lowest monthly trading volume for the year. Price fluctuations have been identified as one of the main contributors to this decline, leading to a significant long liquidation event. Additionally, the figure for August represents the second-lowest combined trading volume on centralized exchanges since October 2020.

Spot trading volume on centralized exchanges has declined for the second consecutive month, dropping by 7.78% to $475 billion. This represents the lowest monthly spot trading volume seen since March 2019. Daily trading volumes on centralized exchanges also hit their lowest point since February 7th, 2019, standing at $5.90 billion on August 26th. These persistently low trading volumes on centralized exchanges have been observed since April this year and mirror the sluggish trading activity witnessed during the bear market of 2019.

Binance, the largest spot trading platform in the crypto market, has experienced a decline in its market share for the sixth consecutive month. In August, Binance’s market share fell to 38.5%, marking its lowest market share since August 2022. In contrast, Huobi, despite being plagued by insolvency rumors, saw a remarkable increase of 46.5% in trading volumes, reaching $28.9 billion. This represents the second consecutive monthly growth in trading volumes for Huobi. As a result, Huobi’s market share has climbed to 6.09%, making it the second-largest exchange after Binance. This milestone represents the highest market share Huobi has attained since October 2021.

Derivative Trading Volume

In addition to the decline in spot volumes, derivative trading volumes also witnessed a 12.5% decrease in August, totaling $1.62 trillion. This marked the lowest monthly volume for derivatives since December 2022 and the second-lowest level since 2021. Derivatives now constitute 77.3% of the overall crypto market, down from 78.2% in July. This represents the third consecutive decrease in the derivatives market share, driven by market volatility and a significant decline in open interest last month.

Binance continues to hold the top position as the largest derivatives exchange by monthly volume, with a total trading volume of $865 billion in August. However, this figure represents an 18.1% decrease compared to July. OKX ranked second in terms of trading volume, with $315 billion, followed by Bybit in third place with $205 billion.

Grayscale’s victory over the SEC may have been a significant win for the crypto industry, but it does not appear to have translated into increased trading volume in the spot market. The decline in trading activity in August can be attributed to price fluctuations and the long liquidation event. Furthermore, the market share of exchanges like Binance has been declining, while Huobi has experienced substantial growth. The derivative market has also witnessed a decrease in trading volume and market share. These factors signal a shifting landscape in the cryptocurrency trading market, highlighting the need for investors and traders to adapt to the changing dynamics.


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