In the month of December, the total volumes on crypto exchanges reached 1.1 trillion dollars.
It was a level that hadn’t been seen since September 2022, as since then the total monthly volumes had never risen above one trillion.
Monthly volumes on crypto exchanges
These data are published by The Block, and the graph highlights how the previous monthly peak in 2023 before December was in March, with less than 950 billion dollars.
The highest monthly peak ever recorded was in May 2021, when altcoins reached new highs driven, among other things, by Elon Musk’s participation in Saturday Night Live, which caused the price of Dogecoin to skyrocket.
At that time, they were even higher than 4 trillion, while in November of the same year, when the all-time high value of the price of Bitcoin was recorded, they had already dropped to just over 2.5 trillion dollars.
Excluding, however, the great bull run of 2021, even in May 2022, when the crypto ecosystem Terra/Luna collapsed, the total monthly trading volumes on crypto exchanges exceeded $1.3 trillion.
However, already the following month they fell below one trillion, and since then only in September 2022 did they return above this level, but only for one month.
The recent boom
So the 1.1 trillion in December 2023 is not only higher than all the monthly volumes in 2023, but we have to go back to May 2022 to see higher volumes.
Furthermore, from this point of view, last month was quite similar to May 2022, clearly indicating that the crypto winter is over.
For example, in December 2020, when the last major bull run started, it was not more than 700 billion, although the following month it had already exceeded 1.5 trillion.
Throughout the history of crypto markets, there have been only 19 months with a total trading volume on crypto exchanges exceeding one trillion dollars, including December 2023. There have been only 5 months with more than 2,000 billion.
Excluding the major bull run of 2021, which started at the end of 2020, the months with over a trillion dollars in total crypto market trades were only eight, of which six were after the bubble, and only two (September 2022 and December 2023) after the definitive burst of the bubble.
Last month’s result is therefore a historic achievement, excluding those obtained during the last major bubble, which not only highlights the end of the crypto winter but also gives hope for 2024.
The year 2024
It should be noted that 2023 was the year prior to the fourth Bitcoin halving (which will occur in April).
December 2019, the year before the third halving, saw very low monthly trading volumes, even below 90 billion dollars.
The previous peak was in December 2017 and January 2018, with over 600 billion, and the peak of 2019 was 250 billion in June. Only at the end of 2020, with the start of the great bull run, volumes returned above 600 billion dollars.
So December 2023 was definitely unusual from this point of view, in many aspects. Moreover, comparing it to the past makes us believe that there are still potential wide growth margins for 2024.
Just to say that in the first two and a half days of January 2024, trading volumes have already exceeded 70 billion dollars, so much so that today they could already surpass the 90 billion of December 2019.
Moreover, for example in January 2020 there was a boom, with monthly volumes skyrocketing to 170 billion dollars from 90 in December. Furthermore, this growth continued in February and March, reaching over 250 billion.
Therefore, everything would suggest a further increase in monthly trading volumes even in January and February 2024, with March expected to be the month of the first interest rate cut by the Fed, and April being the month of the halving.
Crypto exchanges and growing volumes
Still in December 2023, Binance remained the dominant player, although its market share dropped to 39%. However, Upbit came in second place with only 8%.
Therefore, although Binance has lost part of its market share in 2023, it remains by far the preferred exchange worldwide for spot cryptocurrency trading.
For example, in March of this year, the monthly trading volume on Binance was 550 billion, while in December it was 430 billion. In September 2022, it was 560 billion, in line with the March figure, as well as in May 2022 when it was 580 billion.
The decrease in Binance’s market share, despite an overall increase in trading, occurred during the second half of 2023, particularly from October onwards.
In October, the total volume was 510 billion, a significant increase compared to the 320 billion in September. On Binance, however, the increase was much lower, in percentage terms, going from 130 to 200 billion.
September has also been the month with the lowest trading volumes of 2023, the only month of the year below 400 billion dollars in total.