The crypto market was able to recover from the bear market in 2023 much more strongly than initially expected. However, trading volumes remained below average for a long time, but the last few months of the year changed this.
Now that the new year has begun and prices immediately rose again after the turn of the year, the trading volume also rose again. The trading volume has now risen again to its highest level since the end of 2022.
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Crypto trading volume was dramatic for the first time in 2023
Trading volumes reached a tipping point at the end of 2022, when the bear market bottomed out and many traders exited. In 2023, trading volumes continued to decline despite the recovery in prices.
In September 2023, the volume even reached its lowest level in more than four years. That's because investors didn't want to buy or sell. Potential buyers were cautious during the bear market, while potential sellers preferred to hold on to their cryptocurrencies in anticipation of the next market cycle.
Notably, this was not accompanied by a recovery in the stablecoin market. Typically, rising prices are accompanied by rising liquidity and this is usually reflected in the growth of stablecoins. However, this did not happen last year; the total market capitalization of stablecoins had actually shrunk by 2023.
Crypto volume peaks again, Binance remains the largest
Towards the end of the year, trading volumes finally started to increase again. According to data from The Block, trading volume on crypto exchanges reached $1.1 trillion (1,100 billion) in December, the highest level since the end of 2022.
That's more than three times as much as last September, when volume bottomed out at about $323 billion.
This data suggests that interest in the crypto market is increasing again and investors are trading more actively again. This is a good sign of an impending bull market.
The block also tracks where trading volumes come from. Binance has remained by far the largest trading platform in the world in recent months.
Volume on Binance was around $432 billion in December, almost 40% of the total. The crypto exchange had a difficult time with political decision-makers in 2023 and has significantly declined in market share, but has apparently not yet been dethroned.
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