Trading volumes on Binance and Coinbase fall by 23% in September… What is behind this drop?

In September 2024, despite relative stability in Bitcoin prices, Binance, the world's largest centralized crypto platform, as well as several other major players, all recorded notable declines in their transactions. This situation is especially intriguing since, in the past, a rise in Bitcoin prices was often accompanied by an increase in trading volumes. Such a situation seems to indicate that more complex dynamics are at work, between global economic uncertainties and the strategic repositioning of investors.

An unexpected drop in trading volumes on CEXs

In September 2024, Binance saw its trading volumes drop 23%, reaching $344 billion, the lowest level since November 2023, according to CCData data. Other big-name centralized platforms have also shown mixed results. OKX was down 25%, HTX 24%, Coinbase 30%, Kraken 25%, and Bybit 20%. What is particularly surprising is that this decline occurred despite Bitcoin performing well. “Trading volumes were relatively low across the entire crypto ecosystem this quarter,” he said. declared Alex Tseng, Head of Trading at OSL, a centralized exchange platform. This dichotomy between the stability of Bitcoin and the decline in transactions remains inexplicable for many investors.

The reasons given to explain this decline are diverse. Some point to global geopolitical tensions, restrictive monetary policy from central banks, as well as uncertainty linked to the upcoming US elections. Additionally, these external factors appear to have created a degree of caution among investors, thereby creating a “waiting period” in the market. Some investors see this as a simple seasonal effect, linked to the traditional stock market saying “Sell in May and go away”, which could also apply to the crypto market.

The Crypto.com exception and the rise of DEXs

While the majority of large centralized platforms have seen their volumes fall, Crypto.com is an exception, and is recording an increase in its operations. In September, Crypto.com saw its transactions increase by more than 40%. The exchange thus becomes the fourth largest platform in the world by volume, and even surpasses Coinbase in certain segments. This increase seems linked to the acquisition of new institutional clients and the increased enthusiasm of advanced retail traders. However, some investors wonder if this trend can be maintained in the long term, or if Crypto.com will eventually join the downward trend observed on other CEXs.

Alongside this rise in power of Crypto.com, another trend is emerging: the rise of decentralized exchanges (DEX). These platforms, appreciated for their security, pseudo-anonymity and access to assets not available on CEXs, are gaining ground. Their market share in spot trading reached 10.9% in October, although it is still below the annual highs seen. According to Keyrock's Justin d'Anethan, “it's not just about volumes, but a growing preference for decentralized structures, especially after the failures of several CEXs last year.” This shows that the market could evolve towards an increasing coexistence between CEXs and DEXs, as each responds to specific needs.

The decline in volumes on CEXs, combined with the rise of Crypto.com and DEXs, reflects a changing market, where players are redefining their strategies based on macroeconomic conditions and investor preferences. With the political and economic uncertainties weighing on the future, particularly in the United States, the coming months promise to be decisive for the sector. If the end of the year has often been synonymous with a recovery in volumes, it will be necessary to closely monitor the evolution of these platforms to determine whether this decline was only a parenthesis or the sign of a more profound change.