Although the coronavirus pandemic has led many brick and mortar industries to close, cryptocurrency exchanges seem to have had their best month in a long time.
According to an exchange report published by CryptoCompare, the volume of Bitcoin (BTC) exchanges experienced record figures throughout the month.
Daily view of the cryptocurrency market. Source: Coin360
The March 13 crash that pushed the price of Bitcoin from $ 8,000 to a minimum of $ 3,800 in 24 hours was the biggest day for crypto in terms of transaction volumes recorded in the Bitcoin cash markets. On March 13 alone, total daily volumes hit an all-time high of $ 75.9 billion.
Total historical volume Spot BTC. Source: CryptoCompare
Dash-powered Bitcoin sale for cash
Not only did Bitcoin see its biggest peak in cash transaction volumes during the crash at $ 3,750, but cash volumes also increased dramatically, with traders seeking cash amidst the Coronavirus panic. It also triggered similar sales in the global equity and commodity markets.
Bitcoin to fiat volumes also reveal a possible interest in acquiring cryptocurrency as a cover against the economic fallout from COVID-19. The volume of trade between the USD and the BTC increased by 170% in March. The JPY pair also rose substantially, increasing 130%.
According to CryptoCompare, March 13 held record numbers for the BTC / USD pair and other fiat / Bitcoin pairs. Cryptocurrency traders have also taken refuge in stable coins, as the USDTether saw its monthly volume triple during the month of March.
Monthly exchange of volume from Bitcoin to Fiat or Stablecoin. Source: CryptoCompare
Retail demand increases after Bitcoin sale
As the total historical graph of BTC spot volumes shows, Bitcoin spot volumes hit a record high on March 13 and remained significantly high throughout March as the price continued to go up. While the volume of transactions may signal pressure on both selling and buying, several factors indicate an increased interest in buying cryptocurrency.
A recent Coinbase report explained that the 48 hours after the accident brought record figures for the company compared to their annual averages. Buying pressure in their retail brokerage has increased 7% from the typical 60% 12-month average. Coinbase also reported an increase in cash and crypto deposits, new registrations, as well as higher transaction volumes.
Another factor pointing to buying pressure or at least a lack of selling pressure is the net inflow of BTC currencies, derived from the number of coins going out and entering the trade, which fell sharply after a peak in sales of Bitcoin in mid-March.
Google trends are seeing an increase in interest in Bitcoin
Interest in buying Bitcoin can also be seen in Google search trends. After falling prices, queries for the term “Buy Bitcoin” reached the highest level since July 23, 2019. Interest had previously skyrocketed as Bitcoin prices reached an annual high of $ 11,280 in 2019.
Interest in “buying Bitcoin” over time. Source: Google Search Trends
CME Bitcoin data shows institutions have pulled out
In the Bitcoin derivatives market, volumes reached a record level, triggered by price volatility during the Bitcoin price drop on March 13, with a monthly volume of $ 600 billion. Despite this, the regulated derivatives exchange, CME, has seen its trading volume for Bitcoin futures contract down 44% since February following the BTC price crash.
Historical volume of future CMEs. Source: CryptoCompare
The growing disinterest of institutional investors can be explained by the absence of safeguards against crises like the current coronavirus pandemic. The quantitative easing program launched by the US Federal Reserve has restored stock market confidence for institutional investors. The same cannot be said of Bitcoin.
Will retail demand drive the market up in 2020?
It is difficult to say whether retail demand for Bitcoin will continue to grow, as potential buyers could be pushed to more traditional havens like gold or silver. However, it is clear that the institutional interest in Bitcoin has been seriously diminished by the current pandemic and the associated economic fallout.
However, many believe that the price of Bitcoin will increase after the reduction in half, which will cause the value of Bitcoin stocks to rise, a bullish sign for investors as production is cut in half.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You have to do your own research when you make a decision.