Many cryptocurrency exchanges compete for new users and trading volume from active traders. The month of May saw a change in who led the way for the trading volume of the most valuable and most well-known cryptocurrency.
What Happened: The month of May saw Coinbase Global Inc COIN fall behind rival FTX in the trading volume of Bitcoin BTC/USD for the first time ever, according to a report from Kaiko, reported by Decrypt.
"Average trade side on FTX is nearly double that on Coinbase for the BTC-USD pair,” the report said. The average transaction size on FTX was around $2,000 in May versus an average of around $1,000 on Coinbase in the same month.
The report also suggested consolidation in the industry with smaller exchanges struggling to keep up with the likes of Binance, Coinbase, FTX and others.
“The trend suggests that the market is consolidating amid prolonged bearish sentiment with smaller players having a harder time keeping up with the competition.”
A premium representing the difference between Bitcoin prices on the BTC/USD pair on Coinbase and Binance turned negative in May. This marked the first time in six months that the “Coinbase premium” was negative.
“This metric is sometimes seen as a gauge of institutional sentiment because institutional trading volume accounts for over 76% of trading activity on Coinbase, where Binance is largely retail-driven.”
Related Link: 4 Coinbase Analysts On Q1 Earnings, Stock Plummet: Projections Include Short-Term Crypto Winter, Long-Term Growth
Why It’s Important: FTX continues to gain its market share in the cryptocurrency and Bitcoin trading space. FTX had a market share of 44% in May versus 5% 18 months ago, according to Decrypt.
Coinbase saw its trading volume spike in May, but it fell shy of all-time highs that were realized back in May 2021.
Coinbase ended the recently reported first quarter with 9.2 million monthly transacting users. The company said it expects its monthly transacting users to decline in the second quarter along with lower total trading volume.
Price Action: Bitcoin was trading down 2.61% at $29,460.53 at the time of publication Friday.
Coinbase shares were down 8.10% to $67.76 on Friday with a 52-week trading range of $40.83 to $368.90 at the time of publication Friday.
Photo: sdx15 via Shutterstock
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