Crypto trade volume at lowest point since 2020 amidst market turbulence.

In recent months, the crypto markets have experienced significant instability, resulting in the lowest trade volume for a quarter since 2020. Various economic factors and investor pessimism towards cryptocurrencies and the overall economic climate have contributed to a dynamic and challenging environment.

Kaiko, a provider of crypto market data, has shed light on these developments and other key industry trends. Despite the decrease in trade volumes, the crypto industry ended the quarter on a positive note, demonstrating resilience.

Challenges Faced By TrueUSD And Impact On Crypto Market

Prime Trust, the custodian of TrueUSD (TUSD), has faced financial difficulties, leading to scrutiny of the stablecoin. The custodian’s financial shortfall, amounting to approximately $82 million, has presented significant challenges, preventing customers from making withdrawals.

These challenges have also resulted in substantial selling pressure on TrueUSD on decentralized exchanges, following the disclosure that TrueUSD’s auditing firm is a restructured version of FTX’s auditor. However, despite the selling pressure, the price of TUSD has remained around $0.999.

Kaiko has revealed that the potential liquidation of Prime Trust’s holdings could have a significant impact on the token’s price due to the scale of those holdings.

In terms of performance, the second quarter saw a decrease in the open interest for altcoins. Layer 2 tokens, which initially saw gains in the first quarter, experienced reductions ranging from 20% to 40% during Q2, according to Kaiko.

On the other hand, DeFi tokens ended the quarter with an 8% decline but gained momentum in June, driven largely by tokens like MakerDAO’s MKR and Compound’s COMP. COMP saw a boost of over 50% as large-scale investors on Binance intensified their purchasing activities.

Kaiko further revealed that the trade volume denominated in Korean won (KRW) surpassed USD in the final week of the quarter, primarily driven by WAVES and Bitcoin Cash (BCH). The volume spike was largely attributed to WAVES’ price increase after securing support from DWF Labs, while Bitcoin Cash (BCH) experienced a significant rise following its listing on EDX Markets.

Meanwhile, EUR-denominated volume on centralized exchanges recorded a two-year low since the crypto bull run in late 2020. This trend indicates a shift in European market sentiment, adding to the varied developments of the quarter.

Nevertheless, the crypto market has shown signs of recovery from the downturn experienced last year. Over the past 7 months, the market has grown, breaking the bearish trend that persisted throughout 2022.

Both small caps and larger crypto assets such as Bitcoin (BTC) and Ethereum (ETH) have surpassed multiple resistance levels. Bitcoin recently traded above $31,000 before retracing below $30,427 at the time of writing.

Ethereum, on the other hand, has also seen a surge in value and is trading above the $1,900 mark, with potential for breaking the $2,000 region.

Featured image from iStock, Chart from TradingView

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