Crypto trading volumes boom as activity cools on stock markets

More and more daytraders and institutional investors shift their attention to more speculative assets. Trading has boomed in cryptocurrency markets while volumes in stocks and derivatives have tumbled with an increasing number of daytraders and institutional investors setting their sights on more speculative assets.

A slowdown in equities trading last month contrasted with a frenzied first quarter, during which activity jumped in “meme” stocks like GameStop and AMC, turbocharging the profits of banks, brokers and market makers at the heart of global markets.

Monthly data from exchanges, and public filings, indicated retail investors, who had helped fuel the surge in share trading for much of the last year, turned their attention to betting in cryptocurrency markets.

Trading on major crypto exchanges soared to $1.7tn last month, from $1.2tn in March and less than $100bn in April 2020, according to CryptoCompare data collated by The Block Crypto.

Activity also picked up in some crypto derivatives. Trading volumes in ether futures on the CME, a preferred tool of many institutional investors seeking exposure to one of the hottest digital coins, soared to a record of almost 6,500 contracts on Tuesday compared with fewer than 1,000 on April 1.

But it has been even more speculative crypto assets like dogecoin, which started as a joke and has been promoted by entrepreneur Elon Musk, that have garnered particularly abrupt spikes in demand.

“Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk’s hosting of Saturday Night Live,” said Edward Moya, senior market analyst at Oanda. The Tesla founder is due to host the popular US television programme this weekend.

The price of other coins including PancakeSwap and BakeryToken has also rocketed as interest in so-called “alt-coins”, tokens lesser known than industry leader bitcoin, has grown rapidly.