Crypto derivatives volume rises to $3.12 trillion in July – CryptoCompare

Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration

LONDON, Aug 11 (Reuters) – Trading of cryptocurrency derivatives on centralized exchanges rose to $3.12 trillion in July, a 13% month-on-month increase, researcher CryptoCompare said on Thursday, as crypto prices show signs of recovery from the recent market crash.

The derivatives market now accounts for 69% of total crypto volume, up from 66% in June, and helped push total crypto volumes on exchanges to $4.51 trillion in July, CryptoCompare said.

Derivatives exchanges traded as much as $245 billion on July 29, 9.7% more than June’s peak daily peak of $223 billion.

But spot cryptocurrency trading fell to $1.39 trillion in July, a 1.3% monthly decline and the lowest since December 2020, CryptoCompare said.

The crypto market plunged in May and June as concerns about high inflation and interest rate hikes by the Federal Reserve prompted investors to shed risky assets. After the collapse of a major pair of tokens, some cryptocurrency lenders froze customer withdrawals, and several crypto firms have cut jobs. read more

Prices have partially recovered, with bitcoin up 17% in July. At around $24,300, it is still a long way from the November high of $69,000.

“The increase in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in this rally,” said CryptoCompare, noting that there is no US Federal Reserve meeting in August.

Traders are also speculating on the upcoming Ethereum merger, CryptoCompare said, citing an Ethereum network upgrade expected in September. read more

Ether has risen to around $1,900 from the June low of $880.

BinanceUSD — a stablecoin issued by crypto exchange Binance — gained more prominence in July, CryptoCompare said, with spot volumes for bitcoin-to-BinanceUSD trades surpassing bitcoin-to-dollar for the first time.

Binance held the top spot among exchanges, with 54% market share, while Atom Asset Exchange (AAX) was the second largest, with volume rising 26.5% in July.

On Tuesday, US exchange Coinbase reported a larger than expected quarterly loss, with trading volume more than halving in the second quarter of 2022. read more

Reporting by Elizabeth Howcroft; Editing by Richard Chang

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