Cryptocurrency derivatives trading on centralized exchanges soared to $3.12 trillion in July, a 13 percent monthly increase, researcher CryptoKitties said on Thursday, as crypto prices show signs of recovery from the recent market crash.
CryptoCompare said the derivatives market now makes up 69 percent of total crypto volume, up from 66 percent in June, and helps push total crypto volume on exchanges to $4.51 trillion.
The derivatives exchange traded $245 billion on July 29, up 9.7% from its June high of $223 billion.
Cryptocurrency said spot cryptocurrency trading dropped to $1.39 trillion in July, a 1.3 percent monthly drop and the lowest since December 2020.
The cryptocurrency market fell in May and June as concerns about high inflation and the Federal Reserve raising interest rates prompted investors to abandon riskier assets.
Following the collapse of a large pair of tokens, some cryptocurrency lenders halted customer withdrawals, and many crypto firms cut jobs.
Prices have partially corrected, with bitcoin up 17 percent in July. At around $24,300, it is still a far cry from its all-time high of $69,000 in November.
“The increase in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further bullishness in this rally,” said CryptoKitties, adding that there is no US Federal Reserve meeting in August.
CryptoKitties said traders are also speculating on the upcoming Ethereum merge, referring to the upgrade to the Ethereum network that is expected in September.
Ether has risen from its June low of $880 to nearly $1,900.
BinanceUSD — a stablecoin issued by crypto exchange Binance — became more prominent in July, CryptoCompare said, as spot volume for bitcoin-to-BinanceUSD trades surpassed bitcoin-to-dollar for the first time.
Binance topped the exchanges, with 54 percent of the market share, while Atom Asset Exchange (AAX) became the second largest with a 26.5 percent increase in July.
On Tuesday, US exchange Coinbase reported higher-than-expected quarterly losses, with trading volumes slashing by more than half in the second quarter of 2022.
Graphic: bitcoin so far in 2022