Global cryptocurrency markets witnessed a significant downturn in April, as geopolitical tensions and waning interest in US-based spot ETFs resulted in the lowest trading volumes seen in seven months. According to a report from CCData, a London-based digital asset data provider, the total volume across spot and derivatives markets plummeted by 43.8% to $6.58 trillion.
This decline marks a sharp contrast to the record-breaking $9.12 trillion recorded in March. Similar declines were observed in the futures and options markets, with activity dropping by 47.6% to $4.57 trillion. Additionally, spot market volume fell by 32.6% to $2.01 trillion.
CCData’s report attributes this downturn to unexpected macroeconomic data, escalating geopolitical crises in the Middle East, and negative flows from US spot Bitcoin ETFs. These factors caused major crypto assets to retract the gains made in March.
Bitcoin, the market leader, experienced a 15% drop, falling below $60,000 and putting an end to a seven-month trend of gains. 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.
Despite remaining the largest cryptocurrency exchange by volume, Binance’s total market share in spot and derivatives markets dropped 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, Binance’s decline in market share can be attributed to 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%.
Given the current state of the cryptocurrency market, which is impacted by geopolitical and macroeconomic factors, it is advisable for investors to exercise caution during this period of uncertainty.
Please note that the information provided in this article is not investment advice. Investors should be aware that cryptocurrencies carry high volatility and risk and should conduct their own research.