Analytics site CryptoCompare released a new study on crypto trading volume for the month of December 2019. The site revealed that Bitcoin’s trading volume dropped dramatically during the month.
Declining crypto markets
The cryptocurrency markets saw an upturn in the middle of 2019 but remained relatively stagnant for the rest of the year because of which volumes suffered considerably. The trades dropped to $432 billion in the month of December. Top crypto exchanges took a massive 26% hit on their volumes. Ever since the small bull run of Bitcoin fizzles away, trading volumes have decreased considerably. The report suggests a consistent month-on-month decrease in the second half of the year.
Exchanges charging a fee from the users, like maker and taker fees, also experienced an 18% decrease in volume month-on-month. The total volume was $319 billion. The trans-fee mining exchanges, which provided rebates for the users who own their native tokens, also took a big hit. Their volumes decreased by 30% during the month and reached $108.87 billion.
The whole market appears to have entered a losing streak. However, Bitforex managed to gain the top spot during the month. It became the top crypto-to-crypto exchange by volume during the month, totaling to $35.64 billion. Its volume improved by 5% during the month. Bitforex also became the number 1 top trans-fee mining platform. P2PB2B became the top fiat-to-crypto exchange, gaining 11% month-on-month with a total volume of $27.54 billion. IDEX was the biggest decentralized exchange in December 2019 with $8.02 million in trading volume. Its volumes are up 13% month-on-month.
The problematic thing
The most problematic theme in the report is that the markets incline heavily towards lower quality exchanges. The top of the line exchanges represents only 27% of the crypto trading volume. As a result of this, the chances of wash trading in the industry increase manifold. Wash trades are typically used to manipulate market prices.
Crypto derivatives could not live up to their promise as well. The Chicago Mercantile Exchange (CME) derivatives traded just $3.98 billion during the month, marking a 6% decrease. Grayscale Bitcoin Trust fell 20% and traded only $394.72 million in December. Binance has been eating away at this market since it launched crypto futures in September. The Binance BTC perpetual future is the third most popular derivative product in the world, behind Huobi’s quarterly futures. The top spot was occupied by BitMex’s crypto derivatives which traded $53.1 billion during December 2019.