Binance, one of the top cryptocurrency exchanges, has recorded an all-time high in 24-hour trading volume early this week. The 24 hours traded volume on January 04, 2021, was, in the total crypto market, more than $180 billion, and of that, Binance recorded $80 billion on both derivatives and spot platforms.
This record all-time-high (ATH) of trading volume was twice its previous ATH, as tweeted by the Binance Chief Executive, Changpeng Zhao. He disclosed that the trading volume skyrocketed $80 billion in one single day. As per the data analysis shared by CoinMarketCap, the derivative trading volume was $56.8 billion and the spot volume was $23.6 billion. The current increase in trading volume experienced on the crypto-exchange Binance was more than twice the trading volume recorded during the 2017 record-breaking cryptocurrency bull run (that is between November 15, 2017 and December 15, 2017.
Zhao has also clarified that there were some scaling issues experienced by Binance and this may happen again. He also stated that the exchange had some imperfections and efforts are on to fix the issues to make the platform sustain larger trade volumes. In the past also, many cryptocurrency exchanges have experienced issues like service disruption during peak trading sessions. So, the service disruptions when Binance recorded the ATH clearing figures of $80 Billion was not unusual. The largest U.S. cryptocurrency exchange Coinbase regularly goes offline when the Bitcoin prices are highly volatile and leave their clients disappointed. This service outage was last seen during December 2020 on both the Coinbase and Binance exchanges. That was when the Bitcoin prices raced above $20,000 and large trading volumes jammed these platforms.
During those 24 hours, approximately $2 Billion was liquidated in cryptocurrency derivatives. The crypto derivatives don’t have any inherent value. It is only a contractual price agreement between two parties that derives its value from a cryptocurrency. Out of the cryptocurrency derivative trading figures of $2 million, the amount traded on the Binance platform accounted for more than one-third. What actually happened was, after capturing the $34,000 mark, Bitcoin’s price retraced quickly and traders with high-leverage positions were caught unawares and started booking losses thereby losing huge amounts of funds. The day will also be remembered in crypto trading history as it resulted in the largest crypto derivatives wipeout. All the exchanges included Binance recorded the biggest wipeout. Crypto derivatives worth more than $664 were liquidated on Binance’s crypto trading platform. Out of these, the major chunk of the derivatives were long market positions that are over-leveraged.
There was also a $5,500 decline in the value of Bitcoin to cover the $29,000 CME futures gap and the following retrace of several altcoins that contributed to erasing more than $70 billion from the overall crypto market cap. There’s still a gap of $150 million for the market capitalization of the altcoin sector to cross the $1 trillion mark even though altcoins have begun having gains.