The price of any crypto commodity depends on so many factors. However, some traders believe the trading volume of crypto has nothing to do with the price. Well, there’s no such thing as volume has nothing to do with the price. Although it might not be the same with other cryptocurrencies, while it might not be so pronounced in some, the fact remains that volume is one of the price determinants. So, what is trading volume? It is simply the total amount of trading taking place at a particular time. However, it is also essential that we understand the concept of liquidity, which is the amount of that crypto that is available for trading at a single price. So, it is safe to assume that the higher the volume of the cryptocurrency transacted, the more liquid the crypto community becomes.
Bitcoin has its trading volume, and so do other cryptocurrencies. It is, thus, advisable that you check out your cryptocurrency trading volume before purchasing or while trading to keep you informed on the next line of action. You can check them out on instant crypto exchange platforms to get the actual figure. A little comparison of bitcoin as well as other cryptocurrency trading volume is provided below
Bitcoin became more popular due to its price surge in 2020 and also this year, 2021. However, it should be noted that bitcoin wasn’t the most traded on most exchange platforms. According to a 24hrs trading analysis carried out by Statista, Tether was the most traded cryptocurrency, way ahead of bitcoin. However, the case is different when you compare them by market cap, including both NFTs and DeFis. Note that the daily trading transaction of Ethereum is significantly higher than that of bitcoin when accumulated and averaged. However, bitcoin remains the second cryptocurrency by trading volume following tether.
Tether has about $61.53 billion; Bitcoin about $32.16 billion; Ethereum has $16.19 billion, Binance USD has approximately $5.27 billion, and ripple has about $3.51 billion.
Crypto trading volume will not only help you predict the price or tell you which crypto to invest in, but it also gives you the detail of how well the coin has grown and how the growth has been. Is it decreasing at an increasing level or increasing at a decreasing level? Once this is achieved, then it predicts how well investors will pump their investments into the blockchain. However, the more investors and active traders on a crypto blockchain, the more likely the price of that crypto will skyrocket. Hence, the volume has a connection with the price of a cryptocurrency.
The adoption of cryptocurrencies is growing by the day, with many countries adopting cryptocurrencies as their means of exchange, store of value, and even as a means of international trade. Cryptocurrency has made it easy such that you need not worry about the stretched period it takes banks and financial institutions to facilitate financial transactions, especially international transactions. Another important is you don’t have to worry about homogeneity. The price of bitcoin in European countries is the same as that of bitcoin In America and Africa. It’s fast and requires pocket-friendly transaction charges, unlike financial institutions that charge ridiculous amounts for transactions. These transaction charges would depend on the quantity or how bulky the transaction you are facilitating is; nonetheless, it remains one of the safest means of making international trade or even carrying out cross-border transactions without worrying about high transaction costs.
There’s no doubt about bitcoin being an excellent investment. There’s virtually no trader that doesn’t want to have bitcoin in their wallets, either trading or holding for long-term. The growth of bitcoin is such that it has been exponential over the years. Before now, bitcoin had more than 80% dominance on the entire crypto community. However, currently, it has only about 48% dominance, and this is to predict how fast the whole community is growing with several projects with solid fundamentals. The crypto community is such that it can develop any community. El Salvador recently announced their interest in bitcoin, and several other countries are doing the same.
The crypto community is growing, the adoption rate is increasing, and the daily trading volume is increasing. If any investment is to take place, then it should be in the cryptocurrency community. As bitcoin increases, other cryptos also increase, and the more their prices rise, the more the user adoption rate and vice versa. There was a time when the entire crypto community market cap was just 100 billion, now, it’s over 2 trillion dollars, and it has stopped growing.