Spot trading volume on cryptocurrency exchanges has increased for the first time in three months

A new report shows that trading volume on cryptocurrency exchanges has increased 16.4 percent to the highest level in three months despite Binance and Coinbase facing lawsuits.

However, the volume on exchanges remains at the lowest levels not seen since 2019, with Binance’s share falling to around 41.6 percent.

Bitcoin ETF applications triggered an increase in spot volume

A large part of the increase can be attributed to several Wall Street firms that have filed applications for a bitcoin spot ETF with the U.S. Securities and Exchange Commission (SEC) in recent weeks.

Spot trading volume peaked at $36.3 billion on June 30, nearly 51 percent higher than the May monthly high.

On the derivatives side, trading volume in bitcoin futures rose 24 percent in June to $48 billion. Although the volume of derivatives on centralized exchanges also increased by 14 percent to $2.1 trillion, individual exchanges experienced a decline in market share.

The share of total derivatives trading on centralized exchanges fell to 78.7 percent in June, with Binance recording a 10 percent drop to 56 percent.

A research report from Kaiko Research revealed yesterday that Binance’s recent drop in spot volume may have begun after it ended its zero-fee trading promotion in March. Subsequent lawsuits from the U.S. Commodity Futures Trading Commission (CFTC), SEC, and the overall uncertain regulatory situation surrounding the industry have also contributed to the volume decline.

Coinbase, the largest U.S. exchange by volume, has recorded a 2.4 percent drop in trading volume share to date, according to Kaiko Research.

Bitcoin market depth has plunged by $10 million

Complex issues with cryptocurrency exchanges were the reasons for the exit of two critical liquidity providers, Jump Crypto and Jane Street.

Asian exchanges Bybit and OKX reported that market depth for the top ten tokens by trading volume has dramatically fallen. In the last quarter, global bitcoin liquidity fell by $10 million. TrueUSD, the only stablecoin that can be traded without fees on Binance, also recorded negligible volume in the first quarter.

However, CCData expects Coinbase to increase its share of bitcoin volume for the third consecutive month. The company is fighting against SEC allegations that it conducted an unregistered securities offering. Coinbase accounts for about 5.8 percent of global bitcoin spot volume.