United States, 20th Sep 2024, -
Centralized crypto exchanges witnessed a significant 30% month-to-month increase in trading volume for August 2024. The increase in trading volumes went against the norm, defying negative expectations that are typically associated with the month. When crypto prices drop but trading activity increases, it usually indicates that lower prices do not necessarily deter traders from being active in the market. This increase highlights the resilience and enthusiasm for cryptocurrencies among traders and investors.
Part of this growing interest is high-risk high-reward crypto investments. Kane Pepi from 99Bitcoins says that these projects are frequently launched during the presale phase, where tokens are often sold at a lower price before being listed on exchanges. These presales allow investors to gain access to these tokens at the lowest valuation possible.
Several tokens have experienced significant gains after being listed on exchanges like Binance. For instance, Pepe Unchained ($PEPU) is considered one of the top coins with potential upcoming Binance listings, which suggests it has already gained considerable attention and trading volume. While a Binance listing can provide immediate benefits in terms of visibility, liquidity, and often a short-term price increase, it doesn't guarantee long-term success or sustained price appreciation.
This phenomenon of increased activity around new listings contributes to the overall growth in exchange volumes. August saw significant increases in trading activity across various cryptocurrency exchanges. Leading the pack were major exchanges Binance with an increase of 35% and Bybit, with 41%. However, it was the performance of smaller platforms like KuCoin experiencing a 171% increase in activity that stood out.
The increase in trading volume can be attributed to several factors. One key driver was the significant Bitcoin outflows observed from major platforms like Binance and Coinbase. This movement of assets is often interpreted as a bullish sign. It essentially indicates that investors are moving their holdings to long-term storage solutions, potentially in anticipation of future price increases.
The growing uncertainty of potential interest rate cuts by the U.S. Federal Reserve could increase risk appetite among investors. This speculation will most likely prompt both retail and institutional investors to position themselves ahead of any potential market shifts.
Institutional interest in cryptocurrencies has been significant in influencing market movements. Goldman Sachs disclosed a $419 million investment in spot Bitcoin ETF offerings and both BlackRock and Fidelity’s Bitcoin ETF options were among the 15 global ETF inflows. These events highlight the growing recognition of cryptocurrencies as an asset category, within mainstream finance.
The increase in trading activity was accompanied by positive regulatory changes such as the SEC’s decision to abandon efforts to classify specific cryptocurrencies as securities, which likely boosted traders' and investors' confidence.
Interestingly, the increase in trading activity occurred during a time of circumstances. August started with concerns about a U.S. recession leading to a drop in crypto prices. Analysts are keeping an eye out for factors that might impact trading volumes in the months. If Nasdaq's Bitcoin index options get approved as anticipated, it may provide institutions with an approach to handle risks leading to more trading happening potentially.
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Contact person: Alexander reed
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City: California
State: New York
Country: United States
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