The blockchain and crypto research firm Diar has published a report on Feb 4th stating that the trading volumes have dipped to new lows in January. The report suggests that the recent dip in trading volumes have surpassed the lows of 2017.
The report published by Diar further states that the current world leaders among the crypto exchanges, Binance has experienced a 40% decline in its BTC/USD trading pair in January when compared with the trading volumes of December 2018.
Similarly, Coinbase the American crypto exchange giant has also seen its trading pair of BTC/USD hit new lows. The decline on the Coinbase exchange has been worst since May 2017. The current trading volume for Coinbase sits at around $1 billion.
Major Exchanges Around the World Experience New Trading Volume Lows
Apart from Binance and Coinbase hitting new lows, other crypto exchanges around the globe have been on the decline as well. Hong-Kong based OKEx which was high on the 3-month upward momentum saw its trading volume come down to $4 billion from its $5.5 billion high.
Binance CEO Changpeng Zhao in November 2018 has said that their exchange is not worried about the lower trading volumes owing to market slump. The recent report suggests that Binance is currently trading one-tenth of the crypto volume it did in January 2018. However, its current trading volume is still significantly higher than what it was trading a couple of years ago.
Is Trading Volume Decline an indirect Result of Inflated Trading Tactics?
In December last year, the Blockchain Transparency Institute published a report in which it claimed that the world’s top 25 crypto exchange trading pairs listed on Coinmarketcap are fake and inflated.
Exchanges like Houbi and HitBTC used wash trading to show inflated trading volumes on its exchange and there was clear evidence of it. The problem of inflated trading volume was observed on OKEx as well but to a lesser degree.
BTI also claims that Bithumb made use of various altcoins like Monero, Zcash, Dash and Bitcoin Gold for wash trading and the majority of its trading volumes are fake.
The decline in the trading volumes of majority exchanges around the globe could be a direct result of the longest bear market experienced in the crypto realm. However, a lower trading volume shouldn’t be a reason for concern as most of these crypto exchanges uses inflated trading volume to attract new customers.