Trading activity on centralized cryptocurrency exchanges saw a sharp decline in September. Combined spot and derivatives trading volumes fell 17% to $4.34 trillion. This marks the lowest monthly trading volume since June. Binance is among those who suffered the most.
The decline is attributed to the end of the seasonality period. This typically results in reduced market participation.
This is exactly what is happening right now, as both the spot market and the futures market have gone down. The amount of spot trades dropped by 17.2% to $1.27 trillion. It hasn't been this low since June. The amount of derivatives traded on centralized platforms dropped by 16.9%, to $3.07 trillion.
Although things are quiet right now, market experts are still optimistic. They think that things will change in the next few months. One possible trigger is more money coming into the market after the U.S. Federal Reserve cuts interest rates. Some analysts also think that the upcoming U.S. presidential race will make trading more active.
In the past, trading levels have been high in the fourth quarter. In six of the last ten years, it has had the largest quarterly volumes.
The largest cryptocurrency exchange, Binance, had a lot of problems. Its spot trade volume dropped 22.9% to $344 billion. Since November 2023, this is the lowest monthly spot trade volume for Binance. Its share of the spot market dropped to 27%, which is the lowest level since January 2021.
Binance's derivatives market performance also weakened. Trading volume dropped 21% to $1.25 trillion, reaching its lowest levels since October 2023. The exchange now holds a 40.7% share of the derivatives market, the lowest level since September 2020.
Overall, Binance's combined market share in both spot and derivatives has fallen to 36.6%. This represents a multi-year low for the exchange.
While Binance struggled, other exchanges gained ground. Crypto.com showed notable growth. Its spot and derivatives volumes rose 40.2% and 42.8% respectively. Both reached all-time highs of $134 billion and $149 billion. The exchange's combined market share hit 11% in September. This positions it as the fourth-largest centralized exchange by trading volumes.
Even though the total amount went down, open interest rose by 32.1% to $52.4 billion in September. The Federal Reserve cut interest rates by 50 basis points, which led to this rise. There will likely be more rate cuts in the future, which has made buyers more optimistic. It went from 0.70% to 1.21% on average for Bitcoin products to fund.