Trading activity on cryptocurrency exchanges has tumbled from its December peak, industry data shows.
The virtual currency market halved its December peak as retail interest in the virtual coins declines and the prices of many remain far below their recent highs.
Average daily traded volumes across cryptocurrency exchanges fell to $9.1 billion in March and to $7.4 billion in the first half of April, compared to almost $17 billion in December, according to data compiled by crypto analysis website CryptoCompare.
Rocketing prices of digital currencies such as bitcoin fueled a mania in the sector towards the end of 2017 as retail investors across the globe scrambled to get a piece of the action. That triggered regulatory warnings and threats to crack down on the market.
China, a major market, has shut down local cryptocurrency trading exchanges.
Since peaking in December and January, bitcoin’s price BTC=BTSP has more than halved, while the second and third largest cryptocurrencies, ethereum .MVETH and Ripple’s XRP .MVXRP have lost even more of their value.
But crypto-trading volumes in March and April have only fallen back to their levels of November. They remain as much as 25 times above their levels of March-April last year.
“Volumes are down because there was a hype cycle in December on the back of futures products coming to market. You’ll find that most of that was retail-driven, with Korea and Japan as major instigators,” said Charles Hayter, London-based CryptoCompare’s co-founder.
“The governments have now dampened some of that irrational exuberance.”
People involved in the industry say trading activity outside of exchanges, on over-the-counter markets, where larger institutional investors tend to trade, has held up far better.
