Crypto volumes low, Bitcoin & Ether fees down for fourth week.
Key Takeaways
- Bitcoin and Ethereum on-chain activity has decreased for the fourth consecutive week.
- Decentralized exchanges (DEXs) had a higher share of trading volume last month due to regulatory crackdown on centralized exchanges, but DEX volume has since fallen back and the entire crypto space is seeing thin liquidity.
- Many speculate that the US regulatory crackdown will push crypto offshore and/or into the decentralized realm.
- It is unclear whether the regulatory travails of Coinbase, Binance, and other centralized exchanges will reverse the trend of decreasing DEX trading volume.
- Volume remains incredibly thin across the crypto space due to the collapse in prices and an increasingly punitive regulatory regime, particularly for institutions.
- The jump in DEX volume portrayed by the above on-chain data may seem promising at first glance, but that trend seems to have reversed.
- Centralized exchanges provide a vital function for institutional capital to flow into the space, but this seems a long way off now due to the current industry situation.
Despite the fall in on-chain activity and fees for Bitcoin and Ethereum, fees are still significantly higher than the start of the year. However, the entire crypto space is seeing dwindling fees and activity due to various factors.
Regulation has suppressed enthusiasm for the space, particularly for institutions, as seen by Crypto.com suspending its US institutional exchange due to limited demand. The current situation of freefalling prices and an increasingly punitive regulatory regime is the worst possible scenario for the industry.
Therefore, it is not hard to see why institutions have pulled back from the space. The entire crypto space is seeing thin liquidity, and it is uncertain whether the regulatory crackdown will push crypto offshore and/or into the decentralized realm or whether activity on-chain will increase in the future.
