K33 Research says July’s unusually quiet Bitcoin trading activity is squeezing exchange revenue as several trading platforms shut down.
Bitcoin is heading for its quietest trading month since November 2023 as the price remains stuck in a narrow range and traders largely stay on the sidelines.
Average daily Bitcoin spot trading volume has fallen to about $2.2 billion in July, according to the latest report from K33 Research, a crypto market research firm. Bitcoin also dropped about 3% over the past week to $63,300 but remained inside the broader $60,000-$66,000 range.
Other places of activity also seem to be quite subdued as open interest in CME-traded Bitcoin futures is near multi-year lows and perpetual futures’ open interest has flattened out at around 300,000 BTC▲$62,630.00, K33 Research notes.
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The period is particularly hard for crypto exchanges, as they rely on trading fee revenues to generate income. With fewer transactions, their revenue reduces further putting additional strain on the business that is already suffering loss of users to bigger competitors and on-chain markets.
Exchanges Start Closing
BitMEX, once one of crypto’s most influential derivatives exchanges, announced earlier this week that it will close on Sept. 23 following a review of its business and the wider industry.
BitMart also announced an orderly wind-down, while AscendEX stopped operating on July 1. BitMart cited its operating conditions, the market environment and its future strategy, while AscendEX pointed to regulatory, financial and operational pressures. The firm added:
“While regulation and institutional competition have played a role, persistently weak trading volumes and shrinking revenues appear to be the main drivers behind these shutdowns.”
Vetle Lunde, head of research at K33 Research, said uncertainty ahead of today’s Federal Reserve decision may also be keeping traders cautious, with markets split between no change and a 0.25-percentage-point rate hike.
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