There are at least three reasons why crypto derivatives trading volumes are on the rise.
Researcher CryptoCompare has announced in its latest findings that crypto derivatives trading volumes saw a monthly increase of 13% in July, bringing the total volume to $3.12 trillion. This is suggestive of the general outlook for the crypto market, even as crypto prices are now showing signs that the worst might finally be behind.
The Full Report
According to Reuters, the researcher claims that the derivatives market is 3% up in a month. That is, it now accounts for 69% of total crypto volumes. This used to be 66% as of June. CryptoCompare also mentioned that the slight rise was instrumental to how crypto volumes across various exchanges managed to hit $4.51 trillion in the same July.
Furthermore, in terms of daily highs, July had it better. July’s daily high, which happened on the 29th, saw derivatives exchanges trading as much as $245 billion. That represents almost a 10% rise from June’s top daily high of $223 billion.
Interestingly, however, spot cryptocurrency trading saw a decline in July as opposed to the previous month. A 1.3% fall saw spot crypto trading rack up only a sizable $1.39 trillion in July. And according to CryptoCompare, that’s the lowest since December 2020.
What Made Crypto Derivatives Volumes Surge?
There are at least three reasons why crypto derivatives trading volumes are on the rise. Recall that the crypto market crashed amid fears of inflation and the Federal Reserve hiking interests. This made investors sell-off risky assets. Also, the collapse of Terra undoubtedly played a major role in the crash.
However, now that the market is gradually recovering, speculative activities are picking up. More so, it is a general belief that the current rally may take a while.
Additionally, there is an air of confidence among traders as there will be no US Federal Reserve meeting in August. Not to mention that there are speculative activities based on the upcoming Ethereum merge as well. However, the upgrade is expected to take place sometime in September.
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