The extreme volatility and the price crash has led to a significant decrease in cryptocurrency trading volume. Data compiled by Cryptocompare, a London-based analytics firm shows that the trading volume on global cryptocurrency exchanges was down by over 40%. China’s ongoing crackdown on Bitcoin mining and crypto payments also contributed to the drop.
The report estimates that the spot trading volumes dropped by 42.7 per cent to $2.7-trillion. Similarly, the derivative trading figures showed a 40.7% decline month-over-month in June. Total derivatives trading volume was $3.2 trillion.
The analytics and data aggregator firm said that the drop continued as “China persisted with its crackdown on bitcoin mining. As a result of both lower prices and volatility, spot volumes decreased.”
In June, the price of Bitcoin was at its lowest since the beginning of this year. It further dropped by over 6% in June after losing around 40% of its value in the last two weeks of May. Generally, trading volumes jump with extreme market volatility, however, this time it was down because of China’s heightened restrictions on Bitcoin mining and crypto payments.
Also, regulatory restrictions facing major cryptocurrency exchanges like Binance led to a drop in trading volume. Data reveals Binance trading volume dropped by over 56% to $668 billion in June.