As the market continues to spiral downward, trading volume has spiked. Coinbase recently posted a new weekly record.
The coronavirus pandemic is wreaking havoc on global markets across the board. As traders brace for another extremely volatile week, exchanges are posting record trading numbers amid the calamity.
Coinbase Breaks Records
Although Bitcoin’s value has halved in about a week, trading activity on Coinbase and other exchanges has spiked significantly. This past week has been especially noteworthy: according to metrics from Bitcoinity, Coinbase has seen a rapid increase in trading activity.
The small sliver at the end of the below chart shows the spike.
Coinbase’s highest daily spike happened on March 13, which was the day after the massive drop on Thursday. Stocks rallied on Friday (March 13), and Coinbase saw 155,000 BTC traded on its platforms. The rise was drastic, as you can see in the chart.
Will It Last?
It remains to be seen whether this spike in trading volume will last amid the deepening economic crisis. As of now, we are in bearish territory for stocks and a recession seems right around the corner. Unlike before, this will be a recession caused by depressed demand, which is largely uncharted territory.
That’s why many investors and traders are now sitting on the sidelines in cash to wait out the storm. In New York, there have been reports of users withdrawing cash in record numbers to stockpile funds.
Bitcoin is currently trading for $4,722 after dropping again today some 12%. That means that Bitcoin has effectively shed over 50% in value in under a week, disputing the notion that it is a safe store-of-value during crises. The losses lead the entire market on Thursday and have the potential to scare away investors permanently.
So, although Coinbase is recording record trading volumes, it does not mean the volume is in – but it does mean that many eyes are now watching Bitcoin to see where it will settle. That means a rebound seems inevitable, but it’s up to traders to decide where they want to enter. For now, the volatility is near-impossible to predict.