Crypto Volumes Remain Subdued in February

The latest monthly report from LMAX Digital indicates that while there was a revival of sorts from January’s low, activity in cryptocurrencies remains subdued. In contrast to FX markets, volumes in crypto on LMAX Digital have recorded three of the four lowest months since the start of 2021 over December, January and February.

Total volume on LMAX Digital was $23.2 billion in February, up 2.2% from January but just over half what they were in February 2021. While both Bitcoin and Ether volumes were up month-on-month, by 9.4% and 4.9% respectively, the majority of the annual fall was in Bitcoin, with total volume coming in at $12.8 billion per day compared to $30.1 billion in February 2021. Ether activity on the other hand, whilst it was lower, was much steadier, volume was $8.5 billion last month, down 22% from February 2021’s $10.9 billion.

Interestingly, while activity did spike on 24 February, in line with FX markets, and a high for the month was achieved at $1.8 billion, this is not even the highest daily volume of the year-to-date (just under $2 billion on 24 January) and does not register in the top 10 busiest days of the past six months.

Clearly the relative lack of volatility during the month dampened activity and this is apparent in how the previous dominance of large non-banks and HFTs in the LMAX Digital volume reports largely disappeared. While still the largest group at just under $9.3 billion for the month, hedge fund activity was $9.2 billion, the closest the two segments have been. This suggests that more considered positioning activity took precedence, certainly until the end of the month when volatility rose and the market makers could re-assert their position.