According to new data from CoinGecko, trading volumes for cryptocurrencies on major centralized exchanges decreased substantially (43%) in the second quarter of 2022.
Binance, which has been reducing its workforce while pulling back from certain markets and confronting legal action in the United States, experienced a particularly significant decline.
According to CoinGecko’s report on the second quarter, Binance, the largest cryptocurrency exchange globally, saw its market share decrease substantially, from 62% to 51% over just three months. This suggests that Changpeng Zhao’s frequent dismissals of issues as “FUD” (fear, uncertainty and doubt) are not reassuring cryptocurrency traders.
These declines in trading volumes on both centralized and decentralized exchanges occurred even as the price of Bitcoin rose 7% during the second quarter.
Binance’s challenges also affected the stablecoin market. From April to June, Binance USD (BUSD) lost 45.4% of its market capitalization after Binance switched to using TrueUSD (TUSD) as its default stablecoin. This change resulted in TUSD becoming the largest gainer in the stablecoin market for the quarter, with $1 billion minted on the Tron network, representing a 50% increase. Tether remains the top stablecoin, finishing the second quarter with 66% of the total stablecoin market share.
Per CoinGecko, the NFT sector outlook appears negative, even though Bitcoin Ordinals has renewed interest in crypto collectibles. Bored Ape Yacht Club prices have recently dropped to a two-year low, declining 88% from their peak, reflecting difficult times for top NFT projects. In the second quarter, trading volumes for all NFTs decreased 35% to $3.15 billion. And for Solana, which has experienced multiple service disruptions in recent years, demand plunged 79% as prominent NFT collections transitioned to Ethereum and Polygon blockchains instead.
The news was more positive for Ethereum, which has largely withstood the threat from Bitcoin Ordinals. According to CoinGecko, 83% of NFT trading took place on the Ethereum blockchain during the second quarter. However, it is possible this dominance could begin to decline as 2023 progresses.
Although Ethereum holders can now withdraw staked ETH after waiting for years, the total amount of Ethereum locked by validators increased by 30% in the second quarter. This reached close to 24 million ETH, valued at approximately $45 billion at current prices. This suggests cryptocurrency proponents are eager to participate in staking now that retrieving locked up funds is possible.
