Bitcoin spot trading volume into the U.S. dollar decreased by 25.5% last month to 707,000 BTC, the lowest recorded figure for the fiat currency since August 2019. Meanwhile, USDT remained the stablecoin with the largest BTC volume in April, with 3.18 million BTC being traded.
That’s according to CryptoCompare’s April 2022 Exchange Review, which also details that BTC volumes trading against the Japanese yen and the euro also saw declines last month of 19.7% and 23.3% respectively.
Cryptocurrency markets declined in April, with Bitcoin and Ethereum closing the month down 17.3% and 16.9% respectively. These drops are a result of continued macroeconomic uncertainty following the war in eastern Europe and accelerating inflation figures throughout the world.
CryptoCompare’s report that the fall in bitcoin spot volume traded into fiat currencies could also be explained by a surge in the popularity of stablecoins as investors likely moved to take advantage of yield opportunities in the space as well.
According to the report, OKX saw its spot market volumes reach $109 billion last month, a 44% rise from the month prior, but failed to overtake Binance as the leading cryptocurrency exchange. The latter traded $465 billion after seeing its volume decline 5.1% in March.
Meanwhile, CME’s monthly futures volumes across BTC and ETH contracts totaled $43.9 billion in April, a 14.7% rise from the month prior. The rise suggests increased activity in speculation among investors and traders, the report adds.
The muted trading volume against fiat currencies comes at a time in which around 40% of bitcoin investors are sitting on unrealized losses as the price of the flagship cryptocurrency hovers around the $30,000 mark.
According to on-chain analytics firm Glassnode, network profitability defined as a “drop in the percentage of addresses, entities and/or supply in profit,” when BTC was trading at around $33,800 between 60% and 62% of BTC investors were in a state of profit.
Bitcoin’s correlation to equities has been rising over the last few months. That rising correlation has seen analysts at Bank of America challenge BTC’s role as an inflation hedge and instead suggest it trades as a risk asset.
As reported, Bank of America’s analysts expect the correlation between BTC and equities to remain in the near future. Moreover, while bitcoin has often been compared to gold, the correlation between the flagship cryptocurrency and the precious metal has dropped to near zero since June 2021, and has kept trending down.
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The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
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