- According to the data from The Block, the trading volume on crypto exchanges has hit a 2 year low.
- The current volume on trading platforms are similar to those witnessed in December 2020 when Bitcoin broke $22,000.
- The trading volumes fell by over 50% when multi-billion dollar crypto exchange FTX filed for bankruptcy.
- Moreover, the trading volume of NFTs have also declined significantly especially during the holidays.
The crypto winter has hit investors in blockchain technology quite hard, and it seems that there are strong chances of the continuation of this trend. Back in 2021, it was stated by many investors that digital assets would dethrone fiat currencies, but this did not happen, and in 2022, we saw the oldest cryptocurrency, Bitcoin (BTC), crash by 65%. Interestingly, according to the data from The Block, the trading volume on crypto exchanges has hit a 2 year low.
There could be a number of reasons for this collapse in trading volume and one of them is the slowed pace of crypto adoption across the globe. Despite 2021 being the year when a country adopted Bitcoin as legal tender, Bitcoin adoption has been relatively slower than expected. A few other countries like the Central African Republic (CAR) have stepped up to embrace blockchain technology as well.
The Block, which was funded by the founder of collapse crypto exchange FTX, Sam Bankman-Fried, confirmed that the seven day moving average of crypto exchange trading volumes has hit around 47.6% decrease compared to November of this year and currently stands at $352.6 million. The last time investors saw volumes this low was when Bitcoin was trading around $20,000 and broke past the $22,000 price level in December 2020.
The price of the world’s biggest cryptocurrency currently rests at the $16,000 price level while in January, the price of 1 BTC was around to $47,000. However, the collapse of the crypto market was triggered by the news of Russia’s invasion of Ukraine. Since then, the industry has witnessed the collapse of Terra ecosystem along with the bankruptcy of Three Arrows Capital (3AC) and Celsius Network.
It is crucial to note that the collapse of crypto exchange FTX was one of the biggest reasons of the decline in trading volume of crypto exchanges. The numbers fell by over 50% when the exchange filed for bankruptcy and since then, it’s FTT token has crashed by 96% and currently trades below $1.
On the other hand, the trading volume of NFTs have also declined significantly especially during the holidays. Interestingly, the total transaction volume of leading NFT marketplace OpenSea based on the open source NFT protocol Seaport has exceeded 10 million, reaching 10,026,913 transactions, of which 7,986,237 transactions were on the Ethereum and 2,040,676 transactions were on the Polygon Additionally, the total amount of transactions on the Seaport has exceeded $3.5 billion.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.