Global cryptocurrency markets saw a significant decline in April as geopolitical tensions and waning interest in US-based spot ETFs resulted in the lowest trading volumes in seven months. According to a report from London-based digital asset data provider CCData, the total volume across spot and derivatives markets dropped by 43.8% to $6.58 trillion.
This decline represents a sharp decrease from the record high of $9.12 trillion recorded in March. Similar drops were observed in the futures and options markets, with activity decreasing by 47.6% to $4.57 trillion. Additionally, the spot market volume fell by 32.6% to $2.01 trillion.
The report from CCData attributes the decline 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 and fell below $60,000, bringing an end to a seven-month upward trend. The sell-off was attributed 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 declined 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. The decline in Binance’s market share was 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 geopolitical and macroeconomic factors, the cryptocurrency market is facing uncertainty. It is advisable for investors to exercise caution during this period and conduct their own research before making any investment decisions.
Please note that the information provided in this article is not investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct thorough research before making any investment decisions.
