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On-Chain and Exchange Volumes for BTC and ETH Drop as Redtember Approaches

Last Updated September 6, 2023 8:57 AM
Omar Elorfaly
Last Updated September 6, 2023 8:57 AM

Key Takeaways

  • BTC and ETH trading decreased for the fifth consecutive month in August.
  • Stablecoins are up in August but still low compared to March.
  • Investors may face a slow September.

While August was an eventful month for the crypto sector – from Grayscale winning a case against the US Securities and Exchange Commission (SEC) to X (formerly Twitter) kickstarting its crypto business, all the way to more speculation on the future of ETFs – tokens such as Bitcoin, Ethereum, and stablecoins have struggled to thrive.

Lars, a Research Director at The Block, highlighted  key changes in the crypto market, mainly concerning two of the most influential tokens, as well as activity in the stablecoin market.

BTC And ETH Are Down

According to The Block’s research , Bitcoin’s volume decreased by 6.7%, while Ethereum’s dropped by 5.7% in August. The research also points out that August marked the fifth month in which on-chain volumes dropped, now down by 56% compared to the same month last year. 

BTC and ETH miners also saw a decrease in their revenue. BTC miners faced a drop in revenue of 6.8% and ETH one recorded a 7.5% dip.

Open Interest and Futures Contracts

Lars’ analysis also shows  that “Open interest: BTC: -14%, ETH: -18; Trading volumes:  BTC monthly futures volume decreased by 5.4% to $603B.

Meanwhile, CME’s open interest of Bitcoin futures decreased by 4.8% to $2.23B (daily avg volume down 16.6% to $1.37B).”

On top of that, “ETH futures, monthly volume decreased by 15.5% to $264B.”


A form of crypto tokens that peg their values to the US Dollar has had an intriguing month. 

Among the most interesting headlines involving stablecoins concerned PayPal, launching its own stablecoin, PYUSD. The token has been the topic of discussion among representatives of the government as some fear market manipulation. Furthermore, Binance stopped supporting its down BUSD and started pushing its customers to invest in FDUSD.

Moreover, Jeremy Allaire, CEO of Circle, the issuer of USDC, the world’s second most popular stablecoin, highlighted key events for his company’s token. USDC has been integrated into Shopify, bringing stablecoins into mainstream e-commerce markets.

The CEO also pointed out that USDC adoption in alternative markets, such as Latin America, makes up the majority of activity for the token.

These are some of the factors that may explain why Lars reports  that “adjusted on-chain volume of stablecoins increased by 6.8% to $520.9B; Issued supply contracted by 2.2% to $115.1B, with USDT up to 77.2% and USDC up to 21.1% respective market share.”

Bracing For A Slow September

Crypto trader and analyst Rekt Capital speculates  that Bitcoin could reach a new low of $22,000 in September 2023.

The analyst claims that “BTC tends to experience single-digit drawdown in September.

So if BTC retraces, say, an additional -10% in September…

That would mean price would drop to ~$22200

Then that would approximately match the Measured Move target for the Double Top breakdown of ~$22000.”

If that’s the case, then downward trends in BTC & ETH volumes, as well as the decline of their on-chain activity make sense.

Investors are likely to hold on to their wallets/tokens, opting to either sell or hodl, fearing the upcoming devaluation.

The market is quite likely to respond positively if the SEC begins to approve pending ETF applications by the likes of BlackRock and Grayscale.

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