September saw a significant decline in trading activity across centralized exchanges, with combined spot and derivatives trading volumes dropping 17% to $4.34 trillion, as per the latest CCData report.
This marks the lowest monthly trading volume since June, driven largely by the end of the seasonality period, which is typically characterized by reduced market participation. Both spot and derivatives markets experienced declines as traders remained on the sidelines in the face of macroeconomic uncertainty.
Spot trading volumes fell 17.2% to $1.27 trillion, also the lowest level since June. Similarly, derivatives trading volumes on centralized exchanges declined by 16.9% to $3.07 trillion.
However, market analysts are optimistic that the current lull will reverse in the coming months, with potential catalysts like increased market liquidity following a U.S. Federal Reserve interest rate cut and the upcoming U.S. presidential election expected to boost trading activity.
Historically, the fourth quarter has been the strongest, recording the highest quarterly volumes in six of the last ten years.
Binance Faces Continued Market Share Decline
Among centralized exchanges, Binance saw the most significant decline, with its spot trading volume plunging 22.9% to $344 billion. This marks the lowest monthly spot trading volume on the exchange since November 2023 and brings its spot market share down to 27%, the lowest level since January 2021.
In the derivatives market, Binance’s trading volume also dropped 21% to $1.25 trillion, hitting its lowest levels since October 2023. Binance now holds a 40.7% share of the derivatives market, the lowest it has been since September 2020. Overall, Binance’s combined market share in both spot and derivatives has fallen to 36.6%.
Crypto.com Sees Growth Amid Market Declines
While Binance struggles, other exchanges have gained ground. Crypto.com, in particular, has continued its growth trajectory, with its spot and derivatives volumes rising 40.2% and 42.8%, respectively, reaching all-time highs of $134 billion and $149 billion. The exchange’s combined market share hit 11% in September, positioning it as the fourth-largest centralized exchange by trading volumes.
Open Interest Surges After Federal Reserve Cut
Despite the drop in overall trading volumes, open interest surged 32.1% to $52.4 billion in September. This rise came in the wake of the Federal Reserve’s decision to cut interest rates by 50 basis points in September. With the Fed signaling more rate cuts in the future, there is a renewed optimism among traders, as reflected by a spike in the average funding rate for Bitcoin instruments from 0.70% to 1.21%.
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