Spot Volume Fell to Lowest Level of 2021; Derivatives Continue to Gain Market Share with NFTs

The decline in volatility in July with the price of Bitcoin remaining subdued between $35k to $40k, reflected in the on-chain metrics.

Total adjusted on-chain volume, as expected, took a significant drop over 29% to a seven-month low of $405 billion.

Spot volume on centralized exchanges declined sharply, by 31.5% to $1.9 trillion, the lowest levels recorded so far this year, according to a CryptoCompare report.

Here, Binance remains the dominant CEX with a market share of 69.8%, followed by Coinbase’s 8.2%, and Kraken at 3.6%. While FTX’s market share is just 5.4% right now, it has grown from 1.5% at the beginning of the year.

Unlike the centralized crypto trading platforms, where July was the worst month of 2021, in the decentralized finance (DeFi) space, DEXs did slightly better at $72.75 billion in trading volume.

July was the second-worst month after January’s just under $68 billion volume.

Uniswap continues to lead the market with a 67.6% market share, followed by SushiSwap’s 9.4% and Curve’s 7.9%.

Leading the Market

For the first time in three months, aggregate open interest rose from a weekly average of $16.4bn in June to $17.7bn in July, representing a 7.5% increase in line with the rise in crypto prices in the last two weeks of July.

The futures market is leading the cryptocurrency market for some time now. Derivative volumes reached 56.9% of total cryptocurrency volume, the highest percentage share of total volume since November 2020 despite decreasing by 22.6% in July to $2.5tn.

Bitcoin futures and Ether futures volume declined by 29.6% and 22.3%, respectively. But while Bitcoin futures had its worst month in July, Ethereum futures still managed to get in better numbers than March low, since BTC was rallying towards $60k in that month while Ether was still under $2k.

In the options market, which is continuing its growth, Bitcoin’s monthly options volume declined by 25.9% to $10.9 billion, which climbed to nearly $35 billion in May.

Besides trading volumes, the adjusted on-chain volume of stablecoins also decreased by 13% to $387.6 billion, around February-March levels. Meanwhile, the issued supply hit a new all-time high of $110 billion. USDT continues to lose its dominance now at 58.3%, while USDC’s market share has increased to 24%.

The Outlier

Currently, the outlier is the NFT space which is hitting new highs in almost every metric.

NFT marketplace OpenSea, which recently got a $1.5 billion valuation, recorded a 10x growth in volume in less than 30 days, with only about 300 users in January.

Total USD spent on NFT sales has skyrocketed past $286 million, up from $173 million at the May peak. 30-day active market wallets, meanwhile, are looking to break the late March peak and hit 50k.

Top Ethereum NFT collections such as CryptoPunks, Meebits, VeeFriends, and Bored Apes are still on the rise, with their volumes increased collectively by 250%.

Virtual lands are also gaining traction with Decentraland partnering with Coca-Cola, a Sandbox land lot sold for $863,000 while several Axie lands are trading above $500,000.

The renowned interest in NFTs is also pushing transaction fees up on the Ethereum network ahead of the London upgrade this week, which will activate EIP 1559 that will burn base fees and reduce the Ether supply.

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