If crypto in 2022 needed another statistic to sucker-punch it in the gut, it’s here. According to data from The Block’s Dashboard, crypto exchanges saw their lowest trading volumes in the past two years in December 2022.
(Source: The Block)
The Block’s Dashboard showed that the seven-day moving average of crypto exchanges trading volumes hit $352.6 million, a 47.6% decrease from November. This is the lowest point for trading volumes since December 2020, when Bitcoin was valued at around $20,000.
According to The Block, one of the major reasons for this downfall amongst others was the fall of Luna, and bankruptcy of 3AC, FTX, and crypto lenders like BlockFi and Celsius. The Block also points towards Bitcoin’s steady drop in value over the past year as a contributing factor towards low trading volumes. For the record, in December, Bitcoin was trading at around $16,000, a significant decrease from its value of $47,000 in January.
The overall cryptocurrency market cap also fell from $2.7 trillion to $798 million today, underscoring how low prices have dropped from their all time highs in 2021. It’s easy to see how this slow bleed in digital asset values may have deterred investors from dipping their toes into cryptos this past holiday season.
It is also worth noting that crypto exchanges’ trading volumes tend to decrease during the holiday season, especially for non-fungible tokens (NFTs), which have consistently seen lower trading volumes around Christmas in recent years. The holiday season can also see a general lull in market activity, which may have contributed to the decrease in trading volumes. Despite the dip, it’s important to remember that the cryptocurrency market is highly volatile and can experience significant fluctuations in a short period of time.