[Bitcoin Now] Major Cryptocurrency Exchanges See Over 40% Drop in June Trading Volume

Low Bitcoin Price and Volatility, China's Regulations Cited as Causes
JPMorgan: El Salvador, Which Adopted Bitcoin as Legal Tender, Will Face Liquidity Issues

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Last month, the trading volume of major cryptocurrency exchanges decreased by more than 40% compared to the previous month. The sharp decline was attributed to low prices, volatility, and regulations in China.

On the 12th (local time), the U.S. economic media CNBC reported that the trading volume of major cryptocurrency exchanges such as Coinbase, Kraken, and Binance dropped by more than 40% compared to May. According to CryptoCompare, a cryptocurrency information provider cited by CNBC, the highest trading volume in June was $138.2 billion (approximately 158.1 trillion KRW), which is a 42.3% decrease from the highest trading volume in May.

CNBC analyzed that the low price and volatility of Bitcoin were the causes of the decline in trading volume. According to Upbit, a domestic cryptocurrency exchange, Bitcoin, which rose to 81.99 million KRW on April 14, fell to 33.9 million KRW on the 22nd of last month. This represents a sharp drop of about 58.6% over two months. Volatility also decreased. On the 12th of last month, Bitcoin showed a fluctuation close to 10 million KRW in a single day, but the highest price recorded this month was only 41.64 million KRW, and the lowest was 38.12 million KRW. As of 2:48 PM on the 13th, Bitcoin was priced at 38.85 million KRW, down 0.88% from the previous day.

China's regulations were also pointed out as a cause for the decrease in trading volume. On the 21st of last month, the People's Bank of China declared that it would track funds related to cryptocurrency exchanges and regulate mining and related companies. As a result, 90% of cryptocurrency mining companies in China were shut down. In a report, the foreign investment bank UBS analyzed, “National regulations can collapse the bubble-ridden cryptocurrency market, and China is an example of this.”

Meanwhile, the U.S. major investment bank JP Morgan warned that El Salvador, which accepted Bitcoin as legal tender, is facing a crisis. According to the U.S. economic media Bloomberg on the 11th, JP Morgan's Latin America analysis team explained in a report, “More than 90% of Bitcoin is held in wallets without being cashed out, so there is insufficient liquidity to use it as legal tender,” adding, “There are significant limitations to using it as a means of transaction.” Earlier, the El Salvador Congress approved Bitcoin as legal tender for the first time in the world. President Nayib Bukele of El Salvador said, “If Bitcoin is accepted as legal tender, it will gradually lead to job creation and economic development.”

This content was produced with the assistance of AI translation services.