A Closer Look at Bitcoin’s Rally Suggests the Depth of Demand Is Deceptive

tech.hindustantimes.com:

Crypto trading volumes seem to have surged last quarter as token prices spiked higher. But looking at the data more closely paints a different picture.

When looking at overall trends, Bitcoin trade volumes seem to have spiked, with two trading pairs standing out during that stretch — Bitcoin-Tether and Bitcoin-BUSD, a relatively little-known stablecoin trading on the Binance platform that has since halted issuance, according to crypto market data provider Kaiko. Those two were the top-traded duos on that exchange in the first three months of the year.

But isolating just the Bitcoin-dollar trade pair — which trades on exchanges like Coinbase and Gemini — shows volume was the lowest since 2020, the researcher said. During that time, regulators cracked down on the industry with a number of lawsuits and actions.

The Bitcoin-dollar pair measure may be a better way of representing what volumes actually looked like without zero-fee trading during the first three months of the year and shows a “starkly different trend,” according to Kaiko's Clara Medalie, who published research on the topic alongside with Conor Ryder, research analyst at the firm.

“That's where the Binance effect comes into play — essentially the vast majority of Bitcoin volume over the past year has been for zero-fee on Binance exchange,” said Medalie in a YouTube video discussing the firm's findings.

Binance, the world's largest crypto exchange, last year introduced zero-fee trading on a number of market pairs. That helped it gain more than 20% in market share, according to Kaiko. But in March of this year, the exchange halted that offer for 13 Bitcoin trading pairs (though it still allows it for Bitcoin-TrueUSD, which now makes up the largest Bitcoin trading