Bitcoin trading volume peaks against weaker currencies

As the global economy continues to reel from high inflation and the energy crisis, several currencies have seen their purchasing power and value fall against the US dollar.

The abnormal jump in trading volume suggests that investors and traders can hedge their weakened currencies with bitcoin as well as stablecoins.

Traditional and crypto markets saw a big drop in September as macroeconomic conditions continued their bearish sentiment.

Bitcoin remained the least volatile asset and the most dominant across major cryptocurrencies. In September, BTC outperformed both the S&P500 and the Nasdaq, which saw negative returns of 9.34% and 10.5% respectively, falling for the second consecutive month.

Ethereum (ETH) was the worst performer after the long-awaited merger turned out to be a “buy the rumor, sell the news”.

Following the merger, the price of Ethereum fell to $1,300 levels, trading below its 50-day moving average while volatility also increased.

This led to a 36.2% decline in spot volumes to $439 billion. Future volumes also saw a 6.52% drop to $932 billion, showing continued relative strength against the spot markets.

Since futures allow market participants to bet against an asset more easily, it is not surprising that these volumes have remained high compared to spot.

According to CryptoCompare, volatility across cryptocurrency markets saw a slight increase in September due to the interest rate hikes and volatile macro environment. Ethereum and Solana continued to be the most volatile assets with 30-day volatility of 80.0% and 82.6% respectively. Bitcoin’s volatility rose 19.2% in September, breaking a downward trend that started in June.

While most volumes fell in September, both USDT and USD volumes for BTC increased by 15.4% and 15.1% respectively, suggesting that market participants are piling into BTC following recent volatility in fiat currencies including British pound and Japanese yen.

USDT volumes for ETH saw a huge 49.4% drop amid the transition to Proof of Stake. Cardano and Solana saw declines in USD volumes, while SOL saw a noticeable 10.5% increase in USDT volumes in September.