Nate Maddrey and the Coin Metrics research team noted that during the past month, Ethereum (ETH) trading volumes have been catching up with Bitcoin (BTC) volume on Binance, the world’s largest crypto exchange.
Although Bitcoin led by a significantly large margin at the start of 2021, Ethereum volume took a giant leap forward last month, the Coin Metrics team confirmed in their latest State of the Network report.
The past month was an “outlier” in many ways with “meme coins” such as DogeCoin (DOGE) dominating headlines and a major crash that “took down the market,” the report added while pointing out that it still might be “too early to tell whether these trends will last or if they were just a flash in the pan.”
Coin Metrics also mentioned that crypto trading volume data provides key insights into what actually happened in the digital asset markets during the past few months.
As noted in the report from Coin Metrics, smaller-cap coins have surged “across the board” this year, with altcoin trading volume (“altcoin” meaning any non-BTC or non-ETH crypto) on Binance surging in January and peaking on May 10, 2021 – which was right before the major market crash.
Binance supports numerous altcoin pairs, so it’s “not surprising” to see Binance altcoin volume “overtake BTC and ETH,” the report noted while adding that the ratio of altcoin volume to BTC has “taken a noticeable leap upwards considering it was almost even to start the year.”
The report further revealed that a big part of the Binance altcoin surge was due to Dogecoin. DOGE trading volume on Binance briefly surpassed BTC and ETH volume in May, “although it has since declined.” However, there’s been an increase in other altcoins such as Binance Coin (BNB), Ripple (XRP), Cardano (ADA), and Polygon (MATIC).
As confirmed by the Coin Metrics team, ETH trading volume (overall) on Binance “surpassed BTC volume in May, although it was relatively close: about $191B for ETH compared to $188B for BTC. DOGE came in third at about $116B.” Other exchanges “showed similar trends over the last month,” the report noted. ETH trading volume “shot up on Coinbase in May (counting only USD and stablecoin pairs), with a large spike on May 19th,” the report revealed.
As noted by Coin Metrics:
“ETH volume surpassed BTC volume on Coinbase by a wider margin than on Binance. Coinbase did not offer Dogecoin trading in May (although they introduced it in early June), so it did not have a DOGE rush similar to Binance. But it did have a relatively high amount of volume for some other altcoins, led by MATIC, ADA, and Ethereum Classic (ETC).”
The report also mentioned:
“Continuing the trend, ETH volume edged out BTC on FTX, although not by much. But comparatively, the top altcoins made up a lower percentage of total volume on FTX than on Binance and Coinbase.”
The report further noted that ETH volume also “topped BTC volume on Huobi” and “similar to Binance, DOGE volume surged on Huobi, taking the spot as the third most traded currency by volume.”
Although Ethereum managed to overtake Bitcoin volume on most of the large trading platforms, BTC still “leads on the Chicago Mercantile Exchange (CME), a preferred destination for institutional investors.”
CME only launched ETH futures in February 2021, however, they’ve been “gaining momentum since then,” the report noted while adding that it seems retail investors trading on exchanges such as Binance and Coinbase have “favored ETH over the last month.” It also appears that institutional investors continue to favor BTC, the report added.
The report continued:
‘”The markets continued to move mostly sideways over the last week. Bitcoin and Ethereum usage both stayed relatively flat, with daily active addresses dropping 2.5% and growing by 3.3% respectively. Ethereum daily transaction fees dropped by over 35% week-over-week as gas prices continued to fall. And Bitcoin transaction fees followed a similar pattern, dropping by 40.5%.
The report added:
“Bitcoin’s difficulty was adjusted downward by about 16% at the end of May. Bitcoin difficulty adjusts every two weeks to keep a target block time of ten minutes on average. A higher difficulty requires a higher aggregate hash rate to keep block time at ten minutes, while a decrease in difficulty signals hash rate has dropped.”
The report further revealed that the Bitcoin hash rate fell in mid-May 2021 after the BTC price crash and reports that certain Chinese crypto mining operations had been knocked offline. While a 16% decrease is a considerably large difficulty adjustment, it followed “a 22% increase earlier in May,” the report noted while adding that the difficulty is “still above levels of early May which signals that the hash rate drop was likely less severe than initially feared.”
The report also noted:
“Tezos daily active addresses (30-day average) have surged since March after Tezos-based NFT marketplace Hic et Nunc started gaining traction. Tezos’ relatively low transaction fees makes it economical to sell NFTs at low prices compared to Ethereum, which has led to a surge of both artists and collectors.”