Bitcoin Futures Trading Volume on Cboe and CME Has Fallen Heavily Since July 2018

The latest research by TradeBlock on Bitcoin futures trading volume in the U.S. shows that the monthly trading volumes on Cboe Global Markets and CME Group have fallen significantly since Summer 2018.

TradeBlock is a New York-based crypto-focused research boutique. Its investors include Andressen Horowitz, Y Combinator, and Digital Currency Group (DCG). In its latest research report, which looks at the two major U.S. exchanges that launched Bitcoin futures in December 2017, Cboe and CME, it says that the monthly Bitcoin trading volumes have fallen "since reaching a peak in the summer of 2018" and that "total bitcoin futures trading volume across the CME and the Cboe reached near parity with total bitcoin spot trading volume across five of the largest US accessible digital currency exchanges."

CME vs Cboe Bitcoin Futures Notional Trading Volume

Cboe launched Bitcoin futures trading on 10 December 2017 and CME followed suit a day later. 

TradeBlock - 9 Feb 2018 - Fig 1.png

As you can see, in that month, the trading volume on Cboe was slightly ahead of CME; however, in 2018, "Cboe lost significant market share to the CME."

Bitcoin Spot Trading Volume Across the Five Major U.S. Exchanges

The chart below shows that "Bitcoin spot trading volume at popular US based digital currency exchanges, such as Coinbase, have seen trading activity fall considerably as digital currency prices declined after reaching a market peak in December 2017/January 2018."

TradeBlock - 9 Feb 2018 - Fig 2.png

This is understandable given that the crypto bear market started around the beginning of 2018 and the Bitcoin price continually fell over the course of the year, thereby decreasing the appetite for Bitcoin (and crypto in general) in retail investors. As we reported on 8 November 2018, even spot exchanges outside the U.S., were not immune, with the Binance CEO saying back then that crypto trading volumes on his exchange has fallen 90% since January 2018.

Combined Bitcoin Futures Notional Trading Volume at the CME and Cboe

Referring to the chart below, TradeBlock's research report also notes that "peak notional trading volume in bitcoin futures contracts occurred in the months of July and August before beginning to decline in the fall and winter of 2018,"with the rise in November explained by the "heightened volatility in asset prices following sudden price crashes during the month." 

TradeBlock - 9 Feb 2018 - Fig 3.png

With Bakkt, ErisX, and CoinFLEX all planning to launch Bitcoin futures products in the next few months, it will be interesting to see (1) how the trading volume levels on Cboe and CME are impacted and (2) whether these three exchanges will have any luck in reversing the trend in declining trade volumes for Bitcoin futures that we witnessed in the second half of 2018.

Featured Image Credit: Photo via All charts courtesy of TradeBlock.

Top-Tier Crypto Exchanges' Volumes Climb Back to One-Third of Total Market Share

The aggregate trading volume of top-tier cryptocurrency exchanges has increased by 61.2% during the month of January, while the volume of lower-tier crypto exchanges increased 46.4%.

According to CryptoCompare’s January 2020 Exchange Review, the trading volume of top-tier crypto exchanges – those rated AA-B according to its Exchange Benchmark – climbed last month to represent 29.3% of the total trading volume in the space.

The rise is significant as in December, the cryptoasset data provider’s report showed top-tier cryptocurrency exchanges were seeing their trading volumes drop as they lost market share to lower-tier crypto exchanges, those rated C-F. At the time, they represented 26.4% of the cryptocurrency market’s total trading volume.

top tier trading volumesSource: CryptoCompare Exchange Review

The report further found that exchanges that charge taker fees represented 76% of the total volume last month, while those that implement the controversial trans-fee mining (TFM) model represented 22%.

It also found that regulated bitcoin derivatives are still dominated by the CME, whose total trading volumes went up 145.6% since December. Grayscale’s Bitcoin Trust product (GBTC) saw its total trading volume rise 131% since December.

As for derivatives trading on cryptocurrency exchanges, in January OKEx represented the majority of daily derivatives volumes, trading $4.96 billion per day and capturing 31.1% of the total market share. Huobi traded $4.29 billion a day for 26.9% of it, while BitMEX traded $3.13 billion for 19.6%.

Pure crypto-to-crypto exchanges notably represented 75.4% of the market’s trading volume, in a similar proportion to the last two months. The stablecoin space, per the report, is still dominated by Tether’s USDT, as it still represents 94% of the total Bitcoin trading volume into the top four stablecoins.

Decentralized Exchanges Lose Trading Volume

CryptoCompare’s report also addresses decentralized cryptocurrency exchanges, noting IDEX was the largest one in January. It traded a total of $10 million as its trading volume went up 25.4%, and it was followed by Switcheo and Bitsquare. While these platforms’ volumes went up, DEXs as a whole have been losing volume.

dex CHARTSource: CryptoCompare Exchange Review

According to the report they have diminished 88% since early 2019 to now represent a small fraction of the global spot exchange volume. In January, decentralized trading platform traded $17.8 million in total, representing 0.003% of the market. In January 2019, for comparison, they traded $148 million.

Featured image via Unsplash.