Bitcoin experiences a record-low transaction volume as spot trading diminishes
Ever since February 2024, Bitcoin has maintained a trading range between $60,000 and $72,000, aside from a couple of outliers. This has resulted in a predominantly neutral momentum for the leading cryptocurrency, which is now witnessing a decline in both trading and transaction volume.
Data obtained from Santiment on June 2 reveals that the seven-day trading volume for Bitcoin has dropped below $14 billion, reaching levels last seen in 2023 when the cryptocurrency was trading at below $30,000. The lack of interest in Bitcoin trading is further highlighted by the significantly low on-chain transaction volumes, with only 722,000 BTC being moved within a span of seven days. This is in stark contrast to October 2023 when the network recorded 1.79 million BTC being transacted, despite having similar trading volumes and half the price.
When examining the larger picture, it becomes apparent that Bitcoin’s current on-chain transaction volume is at its lowest point since its inception. This indicates a significant decrease in network activity, which has not kept pace with the growing demand for speculative Bitcoin investments over the years.
On another front, the approved Bitcoin spot ETFs introduced this year have generated $1.73 billion in trading volume, according to data from IntoTheBlock and Yahoo. In total, these ETFs have seen a trading volume of $12 billion over the past seven days, equivalent to Bitcoin’s spot volume on crypto exchanges. This suggests a growing interest in trading regulated and custodial exchange-traded funds rather than directly investing in Bitcoin itself.
The derivatives market also provides evidence of the increasing interest in purely speculative trading of Bitcoin. CoinGlass data reveals a daily trading volume exceeding $34 billion, nearly three times the seven-day volume for spot trading.
Notably, the volume of futures contracts and other Bitcoin derivatives has remained relatively stable since reaching its peak in March 2024.
To summarize, these indicators point to a greater market focus on speculating on the price of Bitcoin through ETFs and derivatives, rather than acquiring Bitcoin for long-term holding or conducting peer-to-peer transactions using the permissionless blockchain.