Cryptocurrency trading volume reaches highest level since FTX collapse
Cryptocurrency trading volume on centralized cryptocurrency exchanges has reached its highest level since the FTX collapse last November
The share of transactions in stablecoins rose from 61% to 78% over the year, with fiat currencies falling to 19%. Of these, the US dollar now accounts for less than half, up from almost 70% a year earlier
Cryptocurrency trading volume has reached its highest level since the collapse of FTX, according to a report by analyst firm Kaiko. On 14 March, aggregate trading volume on 18 of the most liquid centralized cryptocurrency exchanges rose to $51bn for the first time in four months. At the time of the FTX crash, volumes were as high as $80bn.
The increase in trading came on the back of the rise in bitcoin, according to the report. Analysts point out that BTC's appreciation has largely outpaced that of other cryptocurrencies. This is best reflected in BTC's price-to-Ethereum ratio. It has reached its highest level since July 2022, with BTC up 31% since March 12 and ETH up 18%.
At the same time, despite growing trading volumes, liquidity remains low. The report's authors believe this is likely due to the closure of major providers of dollar liquidity to cryptocurrency markets, including Silvergate SEN Bank's payment network.
"With increasingly limited access to fiat money, we can expect to see an increased market share of stablecoin on centralized exchanges, especially on offshore platforms such as Binance, which are already cut off from fiat payment systems," the report said.
Today, 78% of all transactions on centralized exchanges are conducted in the stablecoin, up from 61% a year ago. The share of trading in fiat currencies is 19%. Of these, the US dollar accounts for 47%, up from 69% a year ago. The Korean Won is now in second place with 39% of fiat transactions.
The remaining 3% of transactions come from bitcoin, Ethereum, and native tokens from crypto platforms such as BNB.
Interest in bitcoin is not only increasing in spot markets, investors with perpetual futures are also shifting their attention toward the first cryptocurrency. According to the report, open interest in bitcoin futures increased by 51% between 13 and 19 March, while the number of Ethereum futures positions increased by only 18%.
On March 20, open interest in bitcoin futures reached the highest since November 2022, exceeding $12.2 billion. Historically, the increase in this parameter indicated increased attention on the underlying asset and preceded the establishment of new price records.
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