- Cryptocurrency trading volumes between 2020-2021 have grown beyond $16 trillion, with FAANG stocks being left behind at $12 trillion.
- The growth is linked to the 2020-2021 bull run and increased institutional adoption by firms such as Ark Invest and Square.
Cryptocurrency trading volumes have now surpassed the largest public equities markets with over $16 trillion being moved on the markets daily. As tweeted by Ark Investment Management analyst Yassine Elmandjra, FAANG stocks’ annual trading volume comes second to crypto with $12 trillion recorded. FAANG stocks are made up of stocks from tech companies- Facebook, Amazon, Apple, Netflix, and Alphabet which owns Google. Yassine added that the annual growth in crypto trading volumes is “up more than 8-fold from last year.”
Through 2021, crypto markets have experienced massive growth in trading volumes. Specifically, Coinbase – US giant crypto exchange – has this quarter recorded trading volumes exceeding the spot market trading volume year-over-year. Q2 figures were in excess of $460 billion, representing a 1550 percent year-long increase from $28 billion.
Cryptocurrency trading volumes proliferation
Interestingly, institutional trading volume has made up the majority of the total trading volume. In Q2 2020, institutions accounted for $17 billion in trading volume, whereas in Q2 2021, the figure has climbed to $317 billion.
Other than this, the explosive development is likely associated with the late 2020-early 2021 Bitcoin run. The largest cryptocurrency saw a 260 percent bull run in October-December last year. All other altcoins followed the trend since they are correlated to Bitcoin. Despite the April-May 2021 rally end marked by a 55 percent retracement, the volume has remained relatively stable.
During the rally, many institutions begun offering crypto-related services to make the best out of cryptocurrency market bull run. Ark Investment is one of them, having received large amounts of private investor funding to advance their goal. The companies have continued to rise to the demand for crypto-related financial services by diversifying their services.
At press time, BTC was trading at $45,210, up 13.8 percent in 7-days, according to our data. The second-largest cryptocurrency Ethereum was trading at $3,144, also up 15.4 percent in a week. Additionally, the overall crypto market cap has increased by 3.44 percent over the past day to $1.92 trillion.
The muddles of the crypto ecosystem
Nevertheless, the crypto ecosystem continues to face a number of headwinds. For instance, unsustainability has been blamed on digital assets with the proof-of-work consensus mechanism, Bitcoin being the biggest of them. US Senator Elizabeth Warren has been quite outspoken about “environmentally wasteful cryptocurrencies” saying Bitcoin consumes more energy than an entire country.
On top of that, SEC Chair Gary Gensler recently sought additional regulatory authority in combating the financial risk of cryptocurrencies. Already, the largest stablecoin Tether and its executives are being probed by the Department of Justice for alleged bank fraud. Ripple (XRP) is itself in muddy waters with the SEC on its back for allegedly selling unregistered securities. Crypto exchanges like Binance and crypto-firms like BlockFi have also made it to the authorities’ black books.