In April, cryptocurrency exchanges witnessed a significant decrease in trading volumes for the first time since September 2023. What are the reasons behind this ?

First decrease in crypto exchange trading volume since september 2023

April marked the first decrease in trading volume on centralized cryptocurrency exchange platforms (CEX) in 7 months. Despite Bitcoin reaching $72,740 on April 8th (which was $1,400 lower than its ATH of $73,750 reached on March 14th), it has since only declined.

Cryptocurrency exchange volume rose since September, hitting $2.5 trillion in March, then declining to $1.6 trillion in April.

The cryptocurrency market capitalization followed Bitcoin’s price decline, leading to a drop in altcoins. While the total market cap was $2.6 trillion on April 8th, it fell to $2 trillion overnight on April 30th to May 1st.

According to CCData, the futures and options market suffered the most, losing 47.6% month-on-month in terms of traded volume. Overall, this decline was attributed to various factors, including reduced interest in spot Bitcoin ETFs, according to CCData.

The decline followed unexpected macroeconomic data, an escalation of the geopolitical crisis in the Middle East and negative net flows from US Bitcoin spot ETFs, leading major crypto-assets to reverse the gains they had made in March.

Indeed, April was the worst month on record for various spot Bitcoin ETFs in the United States. Their worst day in history occurred on May 1st.

Binance, the world’s largest cryptocurrency exchange, managed to maintain its leading position with $700 billion traded in April, although this is much less than its $1.13 trillion traded the previous month. Furthermore, its spot market share has dropped for the first time since September 2023.

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Binance gaining market share since Nov 2023 when Changpeng Zhao left as CEO for Richard Teng. “CZ” has also recently been sentenced to 4 months in prison.

Finally, as noted by analysts at CCData, this decline in trading volume has been observed post-Bitcoin halving in the past. “In line with trends observed over the past 2 cycles, trading activity on centralized exchanges typically slows down in the 2 months following Bitcoin’s halving,” they pointed out.