In the second quarter of 2023, cryptocurrency analytics company Kaiko released some (very frightening) findings from its study of industry patterns.
The cryptocurrency industry has taken a major hit over the last three months, thanks to increased regulatory scrutiny and the collapse of the banking sector in the United States. New data from Kaiko, provides bulls with reason to be optimistic thanks to a micro-rally in June of 2023.
Spot trade activity on all of the major centralized cryptocurrency exchanges plummeted around the end of Q2 2023. Binance (BNB), the biggest exchange in the world, was hit the hardest as 70% of its total spot trading activity disappeared. Kaiko, a top cryptocurrency research organisation, just released its Quarterly Market Report thesis, which included such estimates.
Spot trade volume metrics plummeted to lows not seen since the fourth quarter of 2020 when Bitcoin (BTC) was only beginning to recover from its severe recession of 2018-2020. Binance’s (BNB) underperformance may be ascribed to the exchange’s reintroduction of fees on several Bitcoin (BTC) trading pairings, as well as the unprecedented hostility of regulators.
Over half of the spot trading volume on key Binance (BNB) rivals OKX, Coinbase, and Kraken was lost. The research also notes that trade volume in euro-based pairings has fallen to two-year lows.
Concurrently, trading activity on spot Bitcoin ETF products soared as excitement grew around the possible introduction of such funds by asset management behemoths. For the seventh time, daily trading activity in the ProShares Bitcoin Strategy (BITO) fund exceeded $500 million.
The picture for cryptocurrency bulls seems to be grim across the board. For the five days beginning in the middle of June, Open Interest (OI) measures plunged by 40% as the SEC cracked down on prominent cryptocurrencies, including virtually all of the top 20.
Core governance assets of second-layer solutions for Ethereum (ETH) fared the worst in Q2, 2023, despite the fact that practically all main categories of tokens closed in the red.
In Q2 of 2023, L1 tokens lost 24 percent of their value. Also, according to Kaiko, the BTC+ETH portfolio is one of the few that showed an increase at the end of both the first and second quarters.
U.Today has reported before that despite regulatory scrutiny and a liquidity problem, this combination is still the clear frontrunner in the middle term.
Also Read: Coinbase Shares Rise After A Broad Variety Of ETF Agreements Announced
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