DataLight Longreads

Bitcoin Markets Continue Setting Record Volumes

April 12, 2019


Bitcoin Markets Continue Setting Record Volumes

In the aftermath of last year’s bear market, which saw Bitcoin (BTC) price plummet from a near $20,000 all-time high to $3,200 in December, Bitcoin markets are now starting to set record volumes.

DataLight’s research has shown that the flagship cryptocurrency recently came close to hitting its record trading volume per 24-hour period, seeing close to the equivalent of $25 billion in Bitcoin change hands.

Volumes this high were only seen back in December of 2017 and January of 2018, when the crypto market was close to its all-time high, right before what some would consider the bubble bursting.

It is important to mention that these are the volumes mentioned by the exchanges. While their credibility can be doubted, we also observe high growth also on highly trusted exchanges.

Bitcoin Market Records infographics

While Bitcoin trading volumes, as we can see on the chart, have been seemingly following a pattern associated with its price – or vice-versa – the same can’t be said for its liquidity. Over time, BTC’s liquidity has been steadily increasing, so much so that late last year it was already above its December 2017 levels.

The market’s recovery, that recently saw Bitcoin hit a five-month high that was kicked off by a large 20,000 BTC buy order, seems to have been accompanied by a growth in liquidity. As we can see on the graph above liquidity hit a new all-time high in March.

Back in February, DataLight noted that both Bitcoin (BTC) and Ethereum (ETH) were setting records when it came to liquidity. Ethereum, the second-largest cryptocurrency by market cap, saw its liquidity increase by 2.5 times from the beginning of this year until late February, with its trading volume being close to January 2018 levels.

At the time, Bitcoin’s liquidity had already doubled since the start of the year, hitting a record 15%. Since then, it has jumped to over 25%, as seen in the chart above.

What’s Behind the Increasing Interest?

Bitcoin futures trading volumes have recently hit an all-time high on the Chicago Mercantile Exchange (CME), at about the same time BTC moved up roughly 20% in an impressive rally.

Various factors are behind the increased trading volumes. These include the upcoming launch of the Intercontinental Exchange’s (ICE) venture in the crypto space, Bakkt, which is set to help increase crypto adoption, and will offer physically-settled Bitcoin futures contracts.

J.P. Morgan Chase, the largest U.S. bank and the sixth largest in the world, has recently launched its own cryptocurrency, JPM Coin, while social media giant Facebook is reported to be seeking $1 billion in funding for its own cryptocurrency.

Both of these moves show huge support for the underlying technology.

VanEck’s Bitcoin ETF, which the US Securities and Exchange Commission (SEC) has delayed a decision on until May, just like it did with the Bitwise Bitcoin ETF, is fast approaching. If approved, it may be bullish.

This, as Gabor Gurbacs notes, it may bring increased liquidity using the ETF ecosystem, lower counterparty risk, and more.

While these two may not directly be influencing Bitcoin’s trading volume, they are making headlines throughout the world and drawing attention to the crypto space.

This attention has, in turn, seen more eyeballs turn to Bitcoin and other top cryptocurrencies, as shown by Google Trends data, which recently tripled thanks to the market’s recovery.

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