Crypto Trading Volume Surges in January as Bitcoin ETFs Gain Approval in the U.S.

Spot crypto trading volume surged in January as the approval of bitcoin exchange-traded funds (ETFs) in the United States sparked renewed interest in digital assets. According to CCData, Binance, the largest cryptocurrency exchange, experienced an increase in trading volume, while OKX, the second-largest exchange, saw a decline.

Spot trading volume across centralized crypto exchanges rose for the fourth consecutive month in January, reaching a level last seen in June 2022. The volume increased by 4.45% compared to December, totaling $1.40 trillion. This significant growth can be attributed to the approval of bitcoin ETFs, which generated excitement and attracted more traders to the market.

However, the price of bitcoin (BTC) did not sustain its upward momentum after the Jan. 10 ETF approval. CCData suggests that the subsequent sell-off marked the end of an uptrend that had persisted for months. This indicates that the market sentiment shifted following the approval, leading to a decline in bitcoin’s price.

Binance maintained its position as the largest cryptocurrency exchange by trading volume, with its volume rising by 2.73% in January to $473 billion. Despite its dominance, Binance’s spot share gradually declined over the course of 2023 due to regulatory challenges. Founder and CEO Changpeng “CZ” Zhao eventually stepped down as the company faced an array of charges from regulators.

Coinbase, the chosen custodian for most U.S. spot bitcoin ETF participants, experienced a rise in market share for the third consecutive month, reaching 5.42%. On the other hand, OKX, the second-largest exchange, witnessed a decline in trading volumes and market share in January.

In terms of derivatives trading volumes, January saw a decrease of 2.79% to $3.25 trillion, marking the first decline in four months. The derivatives market, which plays a significant role in the crypto market, saw its market share drop from 71.4% in December to 69.9%. Notably, CME experienced the largest increase in derivatives trading volume.

Overall, January was a busy month for crypto trading, with spot trading volume reaching its highest level since June 2022. The approval of bitcoin ETFs in the U.S. sparked renewed interest in digital assets, leading to increased trading activity. While Binance remained the dominant exchange, Coinbase saw its market share rise, and OKX experienced a decline. Additionally, the derivatives market experienced a slight decrease in trading volumes, but CME stood out with significant growth.