The total volume of cryptocurrency spot and futures market traded in the first quarter of 2020 was approximately $8.8 trillion, according to industry reports.
Futures and Spot Markets Expect Increase in Trading Volume
An industry report by Tokeninsight revealed that the trading of cryptocurrency futures and spot had increased dramatically over the past three months. The $8.8 trillion combined trading volume of the two sectors was due to a 314% quarterly increase for futures trading and 104% for spot trading. In addition to this, the correlation between the Bitcoin price and spot market trading volume in the first quarter of 2020 was extremely low.
According to the report by Tokeninsight titled “Q1 2020 Cryptocurrency Spot Exchange Industry Research Report,” the company looked into over 300 spot cryptocurrency exchanges. However, because of issues such as unreliable data from some small exchanges and the inability to verify data from some exchanges, the report only included analysis from 295 exchanges. Amongst the analyzed exchanges, 41 were new platforms, and 16 were decentralized exchanges.
The spot market took a significant portion of the trading volume. The report stated that the total trading volume of the entire market in the first quarter of 2020 was $6.6 trillion which marks a 104% quarterly increase.
The trading volume value shown in the report was $6.647 trillion. Tokeninsight added that although some of the volumes were from wash trading, the spot trading sector continues to experience significant development. It also added that the relationship between the market trading volume and Bitcoin price was extremely low in the first quarter of the year.
Additional studies conducted by the company showed that Bitcoin’s dominance had increased compared to last year. The report noted that since the market is in a downtrend, investors evidently have insufficient confidence in non-mainstream cryptocurrencies. They went on to state that Bitcoin is likely to retain its dominant position in the first half of the year.
Although 279 exchanges accounted for the over $6 trillion in spot trading volume, Tokeninsight highlighted that there are still plenty of fake trading volumes amongst the emerging centralized exchanges. The company went on to rate the large crypto exchanges based on factors like safety, operations, trading, experience, and terms of use. From its evaluation, the likes of Binance, Coinbase Pro, Kraken, Okex, and Huobi Global are some of the leading trading platforms.
Crypto Derivatives Trading Volume Surpasses $2 Trillion Mark
The second report, titled “2020 Q1 Cryptocurrency Derivatives Exchange industry Report,” looked into the cryptocurrency derivatives market. According to the report, the company analyzed 12 derivatives exchanges, such as Bitmex, Binance Futures, Okex, Huobi DM, Deribit, Bitget, Binance, Gate.io, JEX, FTX, Bitz, BFX.nu, and Kumex.
Tokeninsight highlighted that in the first quarter of 2020, the total futures trading volume in the industry reached $2.1048 trillion. This marked an increase of 314 percent from last year’s four quarters’ average. In 2019, the trading volume of cryptocurrency futures grew steadily, except for the decline experienced in the fourth quarter of last year.
The report mentioned BTC, ETH, and EOS as the major cryptocurrency futures contracts, accounting for over 90% of the total crypto derivatives market turnover in Q1 2020. BTC, on its own, accounted for 78% of the total trading volume in the derivatives market.
The study further revealed that the relationship between cryptocurrency futures trading volume and spot trading volume fell to 0.31 from 0.76 in the fourth quarter of last year. Based on this, it seems that futures market participants could be relatively independent of the spot market.
Tokeninsight added that the cryptocurrency futures market turnover in 2019 was about 20% of the spot market, and this percentage is expected to significantly increase in 2020. The report stated that for the year 2020, it is expected that the futures trading volume will be more than doubled the spot market. Evidently, in the current market conditions, the idea that cash is king is most dominant however, the cryptocurrency futures industry is still developing rapidly.
Amongst the exchanges analyzed, six of them had a total futures turnover above $100 billion in the first quarter of the year. The exchanges included Huobi DM, Okex, Bitmex, Binance Futures, Bitget, and Bybit. Amongst them, Huobi DM and Okex exceeded the $400 billion trading volume mark.
In the meantime, the fully regulated exchanges have not experienced development. The trading volumes of CME and Bakkt are $6.83 billion and $1.51 billion, respectively, Tokeninsight concluded.