Crypto Trading Volume Slows, Boding Ill for Exchanges

Date

Published In

Bloomberg

During the brutal cryptocurrency selloff last month, volumes also tumbled — a development that doesn’t bode well for exchanges that trade the digital tokens.

Total spot volume slumped to $1.8 trillion in January, a decline of more than 30% from the previous month, according to a report from CryptoCompare. That was the lowest turnover since the end of 2020. Even at its intra-month peak of $91 billion on Jan. 24, trading was down nearly 50% from December.

“It’s just an exceptionally quiet, fearsome and uncertain time in crypto,” said Ed Hindi, chief investment officer and co-founder of Tyr Capital. “Smart money, as they say, doesn’t sleep, it doesn’t take holidays. But retail traders in crypto, they do take a break, especially when they get hurt,” he said, referring to an industry term for institutional and other bigger players.

The decline in trading volume will have a direct impact on revenues for Coinbase Global Inc. (ticker COIN) and Robinhood Markets Inc. (HOOD), according to Julie Chariell, a Bloomberg Intelligence analyst. Roughly 90% of COIN’s revenue and about 40% of HOOD’s are driven by crypto trading.

More
INSIGHTS

This website uses cookies to ensure you get the best experience, please accept or decline their use.
By continuing to use this site you will have been deemed to accept the use of our cookies. Click Decline to view our privacy policy.

This website uses cookies to ensure you get the best experience, please accept or decline their use.
By continuing to use this site you will have been deemed to accept the use of our cookies. Click Decline to view our privacy policy.