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Crypto Market Has Struggled Since Spot Ether ETFs Started Trading: Citi
Demand for digital assets has dried up in recent weeks and both bitcoin and ether ETFs have seen net outflows in the last month, the report said.
Updated Aug 27, 2024, 8:52 a.m. Published Aug 27, 2024, 8:49 a.m.
- The crypto market has struggled since the launch of spot ether ETFs, the report said.
- Citi noted that spot bitcoin and ether ETFs have seen net outflows in the past month.
- Stablecoins have been the outlier, with market caps continuing to grow, the bank said.
The cryptocurrency market has struggled since the launch of trading of spot ether exchange-traded funds (ETFs) in the U.S. on July 23, Citi said in a research report on Friday.
The bank noted that other risk assets have also been weak over this period, but crypto has underperformed since the post-nonfarm payrolls (NFP) rebound, on a volatility-adjusted basis. Nonfarm payrolls is a U.S. employment report usually published on the first Friday of every month.
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"Crypto demand has dried up in recent weeks," the report said, adding that spot bitcoin and ether ETFs have seen net outflows in the last month.
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"These outflows have also coincided with relatively muted search interest and subdued network activity," analysts led by David Glass wrote.
This weaker demand is also evident in futures funding rates, which briefly turned negative in August, the bank said.
Citi said that ETF flows may continue to disappoint until the market has more transparency on the "soft-landing versus hard-landing outcome" for the U.S. economy.
Stablecoins have bucked this recent negative trend in digital assets, with supply continuing to grow despite the market correction in August, the report added.
A stablecoin is an type of cryptocurrency that is usually pegged to the U.S. dollar, though some other currencies and assets such as gold are also used.
Read more: Trump Election Win May Be Bullish for Cryptocurrency Markets, Bernstein Says
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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What to know:
- Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.
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