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The cryptocurrency market saw a significant drop in spot and derivatives trading volumes on exchanges in May 2024, according to the latest report from CCData.

Combined trading volume on centralized exchanges fell 20.1% to $5.27 trillion for the month. This decline marks the second consecutive month of reduced trading activity, driven by limited Bitcoin price fluctuation following the network’s halving in April.

Spot trading volumes on centralized exchanges decreased by 21.6% to $1.57 trillion. The derivatives market also suffered a decline, with volumes reduced by 19.4%, reaching US$3.69 trillion.

Despite this slowdown, derivatives market dominance rose to the highest level since December 2023 as traders reacted to the U.S. Securities and Exchange Commission’s (SEC) unexpected approval of Ethereum spot ETFs.

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The approval of Ether spot ETFs led to an all-time high in open interest for ETH derivative instruments, which rose 50.3% to $14.0 billion.

This increase in open interest reflects a growth in institutional interest, driven by the approval of ETFs. During the month, cryptocurrency exchange Bybit achieved a new spot market share record of 7.36%. Despite this, it recorded a 12.7% drop in spot trading volume, totaling US$116 billion.

Binance maintained its position as the largest spot exchange with a market share of 34.6%. However, the exchange recorded a 19.8% drop in volumes, which totaled US$545 billion.

In the derivatives market, Binance’s dominance grew to 45.4% with a monthly trading volume of $1.68 trillion. Next come OKX and Bitget, with market shares of 21.3% and 14.5%, respectively.

US exchange CME posted a mixed performance. While total derivatives trading volume fell 7.42% to $115 billion, ETH futures volumes increased 37.5% to $20.5 billion, the highest since November 2021.

Ether options trading volume also reached a new all-time high, increasing 115% to $931 million. Although trading activity has increased due to the surprise approval of ETFs, it appears that traders are reacting to the event as a case of “buy on the rumor, sell on the news.”

Since the approval of ETFs, cryptocurrency exchanges have seen more than $3 billion in outflows from Ether positions. However, some analysts believe that ETH could surpass its November 2021 all-time high of $4,870. This is expected to occur as soon as ETFs begin trading, possibly this month, due to increased demand pressure.

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