• Cryptocurrency market volatility and trading volumes follow the bull’s trend on the market.
  • While the volume data provided by cryptocurrency exchange may be overstated, the overall upside trend is confirmed by the futures market.

Bitcoin and all major cryptocurrencies surged on the weekend, triggering speculations on potential forces behind the stellar growth. The first digital asset hit the highest level since the beginning of May, 2018. Cryptocurrency market volatility also came close to an all-time high, having recovered from the record lows hit in April. 

Notably, the trading volumes are skyrocketing too, which means that investors join the new bull’s wave on the market. According to JPMorgan experts, Bitcoin trading volumes on crypto exchanges hit $725 billion, which is nearly four times as large as an average figure in 1Q2019. Moreover, it is almost twice as much as during the previous peaks in December 2017 and January 2018. The major altcoins like Ripple’s XRP and ETH also enjoy higher volumes. 

The credibility of the trading volume data may be questioned due to the recent scandal about fake volumes reported by major cryptocurrency exchanges. According to the latest research, published by Bitwise, only 5% of the reported volumes are accurate. Is these estimations are correct, then the real volumes of Bitcoin traded on the exchange in May are $36 billion rather than $725 billion.

In this context, aggregate volumes on both the CME and CBOE futures contracts may shed some light on what’s going on, JPM experts note. 

According to the bank’s estimations, around $12bn of traded volume on these two futures exchanges in May, which is more than twice as high as in April ($5,5 billion). This data suggests that the rise in trading volume is genuine, even if the total figures are grossly overstated by cryptocurrency exchanges.
 

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