Global crypto spot volumes plunge to lowest levels since December 2020

livemint.com:

NEW DELH: Total spot trading volumes on global crypto exchanges crashed 30.2% sequentially to $1.81 trillion in January amid a continued declining trend in virtual digital assets, according to a report by digital asset data provider CryptoCompare.

Total spot volumes touched their lowest level since December 2020 at $1.17 trillion.

Spot volumes have been falling from a peak of $3.2 trillion in November 2021. Over the past few months, crypto assets have remained depressed in direct response to the US Federal Reserve’s intentions to hike interest rates amid concerns over rising inflation.

Prices of top assets Bitcoin and Ethereum closed January at $38,495 and $2,689, down 16.7% and 26.8% since December, respectively.

Interestingly, the derivative markets saw increased activity in January despite the market downtrend, suggesting increased hedging and speculation from market participants as they shift to trading futures and options.

In January, derivatives market volumes remained steady at $2.86 trillion, while spot volumes declined significantly. As a result, derivative markets reached an all-time high market share of 61.2%, breaking the previous all-time high of 57.3% in November 2020.

“Having said this, derivative market volumes remain notably below the all-time highs reached in May 2021, when volumes reached $4.96 trillion," CryptoCompare said in a report.

Further, analysis of the trading data showed that in January, top-tier spot volumes fell 21.2% to $1.6 trillion and lower-tier spot volumes decreased 66.3% to $175 billion. Top-tier exchanges now represent 90.3% of total spot volume.

CryptoCompare ranks exchanges top-tier or lower-tier based on factors that include, geography, legal/regulatory assessment, investment