May 2024 witnessed a notable slowdown in cryptocurrency trading activity across centralized exchanges, which experienced a 20.1% drop in combined trading volume, amounting to $5.27 trillion. This decline continues the trend seen in April, indicating a cooling-off period in the market. Analysts attribute this slowdown to Bitcoin’s relatively stable price, which has hovered around $70,889 since the network’s halving event in April.
Spot and Derivatives Market Overview
Spot trading volumes fell by 21.6% to $1.57 trillion, while the derivatives market saw a 19.4% decline, reaching $3.69 trillion. Despite the overall dip in trading activity, the derivatives market hit its most active point since December 2023. This increase is likely a response to the US Securities and Exchange Commission‘s (SEC) unexpected approval of spot Ether ETFs.
The approval spurred a 50.3% increase in open interest for Ether derivatives, reaching $14 billion. This indicates a growing reliance on crypto derivatives by traders to manage exposure to Ether in anticipation of potential price movements following the ETF launch.
Exchange Performance
Bybit achieved a record market share of 7.36% in spot trading, even as its overall volume decreased by 12.7% to $116 billion, suggesting an ability to attract new users despite the market downturn. Binance maintained its dominance with a 34.6% market share, although its trading volume dropped by 19.8% to $545 billion.
In the derivatives market, Binance further cemented its lead with a 45.4% market share and a monthly trading volume of $1.68 trillion. OKX and Bitget followed with market shares of 21.3% and 14.5%, respectively.
CME and Ether Derivatives Surge
The US-based CME exchange saw a 7.42% decline in crypto derivatives trading to $115 billion in May. However, there was a significant surge in Ether futures and options trading, with ETH futures volumes increasing by 37.5% to $20.5 billion and options trading soaring by 115% to $931 million. Analysts link this surge to heightened institutional interest following the SEC’s approval of spot Ether ETFs, with institutions leveraging CME’s derivatives platform for managing Ether exposure.
Despite an initial spike in trading activity post-approval, over $3 billion in Ether positions have exited crypto exchanges. Nonetheless, some analysts remain optimistic that the launch of spot Ether ETFs could drive Ether’s price above its November 2021 peak of $4,870 due to increased demand.
