According to trading data across the industry’s most trusted BTCUSD spot markets, over the past four years Bitcoin trade volumes have grown by 5000% in US dollar terms.
Average monthly trading volumes have skyrocketed from $0.5 billion in 2016 to over $27 billion in 2020 (January to April).
In this post we compare the Bitcoin market during two halving years —2016 and 2020—using Cryptowatch data to look at how Bitcoin’s spot trading volumes have evolved across nine major crypto exchanges including Bitfinex, Kraken, Coinbase, Poloniex, Gemini, Bitstamp, Binance, BitFlyer and Bittrex.
Our trusted spot exchange list is based on a 2019 study by Bitwise Invest.
Bitcoin Spot Market in 2016
Going into the 2016 halving, Bitcoin was in a different world. The digital asset’s market dominance over the altcoin market was over 80%, the Winklevoss twins were still a year away from receiving Bitcoin’s first ETF rejection from the SEC and the Lightning network was just a few month old whitepaper.
Bitcoin’s price had rallied back over $500 by the middle of the year after a grueling bear market following the digital asset’s rise to a four-figure valuation back in 2013.
Across the nine exchanges on our trusted spot market list, only six were trading Bitcoin four years ago (Bitfinex, Kraken, Coinbase, Poloniex, Gemini and Bitstamp). The monthly average spot trading volume was just $536 million across these exchanges.
As the 2016 halving approached in July that year, Bitcoin spot trading volumes in USD rose and peaked at around $1.5 billion in June as the price of each bitcoin rose from around $400 to $600.
After the 2016 halving, trading volumes tapered back to $250 million in September—as the original cryptocurrency found support in price at around a $10 billion market capitilization. As the price of Bitcoin trended back toward annual highs by December 2016—trading volume also increased to end the year at a higher level than it started.
Bitcoin Spot Market in 2020
Fast forward to 2020 and with the addition of Binance, BitFlyer and Bittrex into the trusted exchange list, trading volume in dollar terms surged 50x in four years—to just under $28 billion in average combined monthly volumes.
This year the spot trading market is no longer dominated by Bitfinex, but instead by Binance who rose to dominance during Bitcoin’s 2017 bull run. As Bitcoin prices fluctuated—between a high of $10,500 in February to the pandemic fueled low of $3,900 in March—combined monthly trading volumes peaked to $33.6 billion in March before settling to $29.2 billion in April.
What happened to Bitcoin’s price after the 2016 halving?
Looking at the total halving-to-halving returns, Bitcoin is currently coming in with a cool 1,500% quadrennial appreciation. Not bad, but maybe a little short compared to the 5000% volume growth in trusted spot trading markets.
However, according to analysis firm Investech, it may actually be a good thing when volume and price both shoot-up at the same time. The technical analysis firm said that when trading volumes and price increase in the same direction it “signals a healthy stock with ever more optimistic investors, and strengthens an overall positive trend.”
Time will tell if Bitcoin’s positive price and volume trend can continue, but until then you can always check out the latest market action for yourself on Cryptowatch.
See you on the other side. Happy halving traders!