The crypto exchange underwent a significant shift in August 2023, as the combined volume of exchanges and derivatives on DEX collapsed by 11.5 percent to $2.09 trillion.
This drop marked the lowest monthly combined exchange volume recorded this year, reflecting the influence of price fluctuations and culminating in the largest long liquidation event since the FTX collapse.
Notably, this performance represents the second lowest combined volume on centralised exchanges since October 2020.
In this article, we look at the key points and notable developments that occurred in the cryptocurrency trading landscape during this pivotal month.
Falling trading volumes on crypto exchanges in August results do not bring good news
Spot trading volumes on centralised exchanges declined for the second consecutive month, falling 7.78% to a total of $475 billion.
This contraction in spot trading activity marked the lowest monthly spot trading volume recorded since March 2019.
To illustrate the scale of the decline, daily volumes on centralised exchanges reached just $5.90 billion on 26 August, a level not seen since 7 February 2019.
Collapse of derivatives trading volume
In line with the decline in spot volumes, the volume of derivatives traded on centralised exchanges also fell sharply in August.
This sector fell by 12.3%, with a total trading volume of $1.62 trillion, the second lowest level since December 2020.
As a result, derivatives market share fell for the third consecutive month to 77.3%.
Not all bad news in August crypto exchange report: Huobi rises, Binance dominates and CME triumphs
Huobi’s remarkable rise
In stark contrast to the general market trend, Huobi has emerged as one of the stars of August 2023.
The exchange claimed the position of the second largest spot exchange by volume with an impressive 46.5 percent surge in spot trading volume to USD 28.9 billion.
This remarkable performance marked the second consecutive monthly increase in trading volume for Huobi, following the previous month’s substantial 79.1 percent increase.
Furthermore, this result propelled Huobi to its highest market share since October 2021, demonstrating its resilience and adaptability in a challenging market environment.
Binance’s dominance in a declining environment
While Huobi shone, Binance maintained its position as the largest spot trading venue in the cryptocurrency market, recording a substantial trading volume of $183 billion.
However, it is important to note that Binance’s market share declined for the sixth consecutive month, falling to 38.5% in August.
This figure marks Binance’s lowest market share since August 2022, highlighting the changing competitive landscape within the cryptocurrency trading industry.
The triumph of the CME options market
Amid declining derivatives trading volumes, the Chicago Mercantile Exchange (CME) stood out as an oasis of growth.
Ethereum (ETH) options trading on the CME hit a new all-time high in August, surging 77.0% to $365 million.
Similarly, options trading on Bitcoin (BTC) grew by 18.8% to reach a total volume of $872 million.
In the same month, the total volume of derivatives traded on the exchange increased by 4.51% to $41.9 billion.
These significant figures reflect the growing interest in options trading and the CME’s prominent position as a hub for derivatives products.
August 2023 was a crucial period for the crypto exchange, characterised by a significant decline in combined trading volumes on centralised exchanges.
The spotlight was on the remarkable performance of Huobi, which rose to second place among spot exchanges by volume.
Meanwhile, Binance, while remaining the leading operator, saw its market share decline.
In the derivatives market, CME’s options offering saw impressive growth, demonstrating the diverse opportunities in the cryptocurrency trading landscape.
As the cryptocurrency market continues to evolve, it is crucial for industry participants and enthusiasts to stay abreast of these trends and developments.