August turned out to be not only an unfavorable month for the prices of major cryptocurrencies but also for the performance of the largest exchanges. According to data collected by Finance Magnates Intelligence, the top ten platforms in terms of spot volumes recorded their worst month in nearly three years. Total volumes fell to $359.59 billion, losing 13% monthly and a staggering 50% year-over-year (YoY).

Sharp Decline in Spot Volumes Among Major Cryptocurrency Exchanges

The total monthly trading volume of the top ten cryptocurrency exchanges, measured by monthly turnover, fell to just under $360 billion. This represents a 13% decline compared to the $413 billion reported in July 2023 and a 50% drop compared to last year’s period ($715 billion in August 2022).

Notably, this was the lowest result for leading exchanges like Binance, Upbit, Hobi, and Coinbase since October 2020, nearly three years ago. For context, these exchanges reached a record volume of $3.7 trillion in May 2021. The August 2023 figure is thus more than ten times worse.

From a market share perspective, Binance continues to dominate, holding 53% of the total volumes reported by the top ten cryptocurrency exchanges in August. Upbit and Huobi were nearly tied for second place, each with a 9% market share. The next positions were held by Coinbase and OKX, each with a 7% market share. Despite regulatory issues in various parts of the world, these exchanges lag far behind Binance.

Huobi Sees Significant Gains While Upbit Faces Steep Losses

Analyzing the performance of various cryptocurrency exchanges, Huobi stands out as the only one reporting a significant month-over-month increase in spot trading volumes. The value rose by 48% compared to July 2023, reaching $31.36 billion. On the other end of the spectrum, Upbit saw its volumes shrink by 48% month-over-month (MoM), dropping from $60.91 billion reported in July to $31.8 billion in August.

The fluctuations in trading volumes for individual exchanges have been summarized in a chart, with detailed information provided below:

Huobi: Monthly volumes increased by 48%, yearly by 36% to $31.36 billionBitfinex: Monthly volumes increased by 4%, yearly decreased by 70% to $3.07 billionByBit: Monthly volumes increased by 3%, yearly by 160% to $23.25 billionBinance: Monthly volumes decreased by 8%, yearly by 57% to $192.12 billionCoinbase: Monthly volumes decreased by 9%, yearly by 55% to $29.59 billionBitstamp: Monthly volumes decreased by 11%, yearly also by 11% to $3.92 billionKraken: Monthly volumes decreased by 16%, yearly also by 16% to $13.76 billionOKX: Monthly volumes decreased by 16%, yearly by 56% to $23.63 billionKuCoin: Monthly volumes decreased by 41%, yearly by 65% to $10.09 billionUpbit: Monthly volumes decreased by 48%, yearly by 53% to $31.8 billion

What Caused the Decline in Cryptocurrency Market Volumes?

Several factors could be responsible for such drastic declines in spot trading volumes in the crypto market and testing lows from October 2020. One of them is undoubtedly the poor performance of Bitcoin and key altcoins in August. BTC lost over 11%, falling for the second consecutive month and losing the most on a monthly basis since November 2022. Ethereum (ETH) also declined in a similar range, reaching the highest monthly decline rate in nine months.

Additionally, summer months are generally not the most active for cryptocurrencies and traditional markets. A July report from Robinhood, for example, showed a decrease of 38% in total trading volumes in the digital asset market.

Falling volumes also signal that investors’ risk appetite is much lower than just a few months ago. Data from analytics firm Glassnode show that in 2023, investor activity in spot and derivative markets fell to the lowest levels in two years.

The industry is certainly not helped by regulatory uncertainty. Lawsuits from the US SEC against Coinbase and Binance, increasing problems for the latter in finding a place in Europe, and tightening cryptocurrency regulations have reduced interest in the sector. This applies to both retail and institutional customers.

Although the June wave of applications to create Bitcoin ETFs momentarily raised investors’ hopes for a market revival, optimism quickly faded. Significantly, since the SEC once again delayed its decision on approving such regulated instruments.

Worse still, September may not bring a reversal of these negative trends. In Bitcoin’s history so far, September has been one of its worst months, in which BTC lost an average of 1.8%. Increases usually appear in October and November, and we can only witness a rebound in spot volumes in that period.

This article was written by Damian Chmiel at www.financemagnates.com.Exchanges, CryptoCurrencyRead More

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