Crypto volume continues to lag behind, Bitcoin and ether fees have dropped the fourth week in a row

the central theses

• The on-chain activity for Bitcoin and Ethereum has declined the fourth week in a row
• The proportion of Dex in the trading volume had increased from 14 % to 22 % last month due to regulatory measures against centralized stock exchanges from 14 %
• Since then the Dex volume has decreased and the liquidity in the entire crypto range is low

many speculate that the hard through the regulatory authorities in the USA will drive crypto in two ways: abroad and/or to the decentralized area. This does not require a big explanation for the former. The tightening of the loops for crypto companies in the USA will force the same companies to move abroad if they want to continue their business with the same capacity (or at all).

but whether this will drive the activity in the chain a more interesting debate. Decentralized stock exchanges experienced an upswing during the pandemic hysteria, but their volume went back drastically in the course of 2022. While the volume also decreased in centralized stock exchanges (CEXS), the ratio of the Dex trading volume to the CEX volume of 16.9 % at the beginning of 2022 to 9.6 twelve months later, the Dex was more than its more conventional counterparts.

Could the regulatory difficulties of Coinbase, Binance and other centralized stock exchanges reverse this trend? The following graphic shows that there was actually a larger proportion of the activities on Dexs in May, with the Dex trading 22.1 % of the volume, compared to 14.7 % in the previous month. In the first twelve Junitagen, however, the proportion again fell to 15.4 %.

Binance was on June 5th and Coinbase on June 6th Things complained about what is strange in view of the above-mentioned trend, since the Dex share has fallen since then. On the other hand, these complaints could have been largely priced in. A few months ago, Coinbase was delivered a message from Wells, while Binance was confronted with numerous studies of various legislators (and is still). Bitcoin's price tells you everything you need to know - it only fell 5 %after it became known that Binance was officially sued while the news from Coinbase did not change anything.

In fact, for whatever reason, it is difficult to draw conclusions from the data mentioned above. The volume remains incredibly thin, as I have discussed in detail so far . In fact, the activities and fees in the chain for Bitcoin have already sunk the fourth week in a row in an immense increase in activity caused by the Ordinal Protocol and the showing BRC-20 tokens in the rear window. Despite this decline, it should be noted that the fees are still significantly higher than at the beginning of the year.

It's not just Bitcoin. Fees and activities go back in the entire crypto range. Below you can see the same diagram, but for Ethereum, where there were also falling fees for four weeks in a row. In contrast to Bitcoin, however, the activity is slowly approaching the level from January.

All in all, the volume in the cryptocurrency area is still incredibly low. This is due to various factors. The first is the drop in prices. When the prices fall, less is inevitable with cryptocurrencies. And since Bitcoin is still 60 % away from its maximum of the end of 2021, the hysteria and the overcrowded order books seem to be a long way off.

but regulation is also a key factor. This has significantly suppressed enthusiasm for the space, with special effects on institutions. We saw a tellway sign at the weekend when Crypto.com hired his American institutional exchange. While its retail platform remains in operation, the company named the limited demand from the institutions as the reason for the decision.

A cocktail of freely falling prices and an increasingly stricter regulatory system is the worst scenario for the industry, and it is not difficult to understand why the institutions have withdrawn from this area.

the increase in the Dex volume shown by the above-chain data mentioned above may seem promising at first glance, but this trend seems to have been reversed. In addition, centralized stock exchanges fulfill an important function so that institutional capital can flow considerably into the room. A few years ago, when companies like Tesla Bitcoin hid in their balance sheets, many were still optimistic that these institutions would flow, but that still seems to be a long way off.