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Global cryptocurrency markets experienced a serious decline in April. Geopolitical tensions and reduced interest in US-based spot ETFs led to the lowest trading volumes in seven months. According to a report by London-based digital asset data provider CCData, total volume across spot and derivatives markets decreased by 43.8% to $6.58 trillion.
What Does the Drop in Total Crypto Trading Volume Mean?
This decline represents a sharp drop from the record $9.12 trillion recorded in March. Similar declines were observed in the futures and options markets, where activity decreased by 47.6% to $4.57 trillion. Meanwhile, the spot market volume fell by 32.6% to $2.01 trillion.
According to CCData’s report, unexpected macroeconomic data, escalating geopolitical crises in the Middle East, and negative flows from US spot Bitcoin ETFs contributed to the downturn. These factors led to major crypto assets retracting gains made in March.
Market leader Bitcoin saw a 15% drop, falling below $60,000 and ending a seven-month gain trend. The sell-off was linked to factors such as an overheated bull market, renewed tensions in the Middle East, reduced likelihood of rapid interest rate cuts by the Fed, and a strengthening dollar index.
Is There Also a Decline in Binance’s Market Volume?
Despite remaining the largest cryptocurrency exchange by volume, Binance’s total market share in spot and derivatives markets fell to 41.5%. The exchange’s spot market trading volume decreased by 39.2% to $679 billion in April, marking its first decline since September 2023.
According to CCData, the decline in Binance’s market share followed the sentencing of its founder and former CEO, Changpeng Zhao, to four months in prison for violating US anti-money laundering laws. However, under the leadership of Richard Teng, who succeeded Zhao, Binance’s spot market share increased from 30.8% to 33.8%.
At this point, the cryptocurrency market is shaken by geopolitical and macroeconomic factors. It is certainly beneficial for investors to act more cautiously in the market during this period of uncertainty.
