August turned out to be an unfavorable month not only for the prices of major cryptocurrencies but also for the performance of the largest exchanges. According to data collected by Finance Magnates Intelligence, the top ten platforms in terms of spot volumes recorded their worst month in nearly three years. Total volumes fell to $359.59 billion, losing 13% monthly and a staggering 50% year-over-year (YoY).
Sharp Decline in Spot Volumes among Major Cryptocurrency Exchanges
The total monthly trading volume of the top ten cryptocurrency exchanges, measured by monthly turnover fell to just under $360 billion. This represents a decline of 13% compared to the $413 billion reported in July 2023 and a drop of 50% compared to last year's period ($715 billion in August 2022).
Notably, this was the lowest result for leading exchanges like Binance, Upbit, Hobi, and Coinbase since October 2020, nearly three years ago. For context, these exchanges reached a record volume of $3.7 trillion in May 2021. The August 2023 figure is thus more than ten times worse.
From a market share perspective, Binance continues to dominate, holding 53% of the total volumes reported by the top ten cryptocurrency exchanges in August. Upbit and Huobi were nearly tied for second place, each with a market share of 9%. The next positions were held by Coinbase and OKX, each with a 7% market share. Despite regulatory issues in various parts of the world, these exchanges lag far behind Binance.
Huobi Sees Significant Gains While Upbit Faces Steep Losses
Analyzing the performance of various cryptocurrency exchanges, Huobi stands out as the only one reporting a significant month-over-month increase in spot trading volumes. The value rose 48% compared to July 2023, reaching $31.36 billion. On the other end of the spectrum, Upbit saw its volumes shrink 48% month-over-month (MoM), dropping from $60.91 billion reported in July to $31.8 billion in August.
The fluctuations in trading volumes for individual exchanges have been summarized in a chart, with detailed information provided below:
- Huobi: Monthly volumes increased 48% and yearly 36% to $31.36 billion
- Bitfinex: Monthly volumes increased 4% and yearly decreased 70% to $3.07 billion
- ByBit: Monthly volumes increased 3% and yearly 160% to $23.25 billion
- Binance: Monthly volumes decreased 8% and yearly 57% to $192.12 billion
- Coinbase: Monthly volumes decreased 9% and yearly 55% to $29.59 billion
- Bitstamp: Monthly volumes decreased 11% as well as yearly by 11% to $3.92 billion
- Kraken: Monthly volumes decreased 16% as well as yearly by 16% to $13.76 billion
- OKX: Monthly volumes decreased 16% and yearly 56% to $23.63 billion
- KuCoin: Monthly volumes decreased 41% and yearly 65% to $10.09 billion
- Upbit: Monthly volumes decreased 48% and yearly 53% to $31.8 billion
What Caused the Decline in Cryptocurrency Market Volumes?
Several factors could be responsible for such drastic declines in spot trading volumes in the crypto market and testing lows from October 2020. One of them is undoubtedly the poor performance of Bitcoin and key altcoins in August. BTC lost over 11%, falling for the second consecutive month and losing the most on a monthly basis since November 2022. Ethereum (ETH) declined in a similar range, reaching the highest monthly decline rate in nine months.
Additionally, summer months are generally not the most active for cryptocurrencies and traditional markets. A July report from Robinhood, for example, showed a decrease of 38% in total trading volumes in the digital asset market.
Falling volumes signal that investors' risk appetite is much lower than just a few months ago. Data from analytics firm Glassnode show that in 2023, investor activity in spot and derivative markets fell to the lowest levels in two years.
The industry is certainly not helped by regulatory uncertainty. Lawsuits from the US SEC against Coinbase and Binance, increasing problems for the latter in finding a place in Europe, and tightening cryptocurrency regulations have reduced interest in the sector. This applies to both retail and institutional customers.
Although the June wave of applications to create Bitcoin ETFs momentarily raised investors' hopes for a market revival, optimism quickly faded. The SEC once again delayed its decision on approving such regulated instruments.
Worse still, September may not bring a reversal of these negative trends. In Bitcoin's history so far, September has been one of its worst months, in which BTC lost an average of 1.8%. Increases usually appear in October and November, and we can only witness a rebound in spot volumes for that period.
