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Spot Digital Asset Trading Volumes Hit A 19-Month High In January

Key Points:

Spot digital asset trading hit a 19-month high at nearly $1.4 trillion in January, close to 2021 levels but below the bull market averages.
Despite attracting $1.6 billion in net inflows, US spot Bitcoin ETFs experienced a decline in trading volume from $4.7 billion to $1.2 billion by January.

In a recent report by Bloomberg, data from CCData reveals that spot digital asset trading volume surged to a 19-month high in January, reaching nearly $1.4 trillion. While this figure is significant, it still falls short of the monthly averages witnessed during the 2021 cryptocurrency bull market.

Spot Digital Asset Trading Hits 19-Month High of $1.4 Trillion

Evgeny Gaevoy, co-founder of Wintermute, anticipates a return to 2021 volume levels by year-end, especially for Bitcoin. Gaevoy commented, “If we reach the levels of 2021 in terms of market fervor, we will need to secure hundreds of millions in trading capital.”

US-spot Bitcoin ETFs have garnered approximately $1.6 billion in net inflows so far, according to Bloomberg data. However, trading volume in these ETFs dropped from $4.7 billion on the initial day to $1.2 billion on Jan. 31, indicating a cooling of hype around them, as noted by Bloomberg Intelligence.

Inflows and Declines Shape Market Outlook for 2024

The impact of these ETFs on crypto markets is evident, with Bitcoin experiencing an 88% surge in the past 12 months, reaching around $43,000. Although briefly touching $49,000 on the ETFs’ debut, it failed to sustain the spike, remaining $20,000 below its 2021 record.

Market makers view the advent of US spot Bitcoin exchange-traded funds as an opportunity to rejuvenate crypto markets, addressing the decline caused by the collapse of the FTX exchange and Alameda Research. This development is expected to be a primary catalyst for a substantial increase in spot digital asset trading volume in the near future.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.