Explore how the post-U.S. election rally propelled crypto spot and derivatives volumes to record-breaking highs in 2024.
I might sound like a broken record but 2024 was a stupendous year for the cryptocurrency market, not only because of its price performance but also due to the massive surge in trading volumes. The U.S. presidential elections proved a major catalyst for the rally, driving both spot and derivatives markets to unprecedented heights. Let’s compare trading volumes going back to 2016, before analyzing the monthly performance during the year.
The crypto market entered 2024 on the back of a strong 2023, which had seen a recovery from the bearish downturn of 2022. However, 2024 outshone previous years, with Bitcoin (BTC) reaching new all-time highs above $100,000 and Ethereum (ETH) following suit along with other Altcoins. This strong price performance fueled massive interest in trading, with centralized exchanges reporting record-breaking volumes.
According to the top chart (below), total trading volume—including both spot and derivatives—has grown exponentially since 2016. Spot volumes, which represent the buying and selling of actual crypto assets, grew steadily in 2024, but derivatives volumes saw the most dramatic increase, accounting for the majority of the year’s activity. Derivatives, including futures and options, now dominate the market, offering traders tools to hedge and speculate, further amplified by volatile post-election market conditions.
A Look Back: 2024 vs. Previous Years
Centralized exchanges experienced a record-breaking year in 2024, with a combined trading volume of $75.8 trillion, eclipsing the previous high of $65.1 trillion set in 2021. This growth was fueled by a significant increase in derivatives trading, which accounted for 69.2% of the total volume, up from 59.5% in 2021, reflecting the growing demand for these instruments in the market.
Looking at the historical data from 2016 to 2024, the growth in trading volumes is striking. From less than $1 trillion in total spot and derivatives volume in 2016, the market has grown to a staggering $75.8 trillion in 2024. Derivatives trading, in particular, has seen explosive growth since 2020, when it first started to rival spot trading in scale.
By 2024, derivatives accounted for more than two-thirds of total trading volume, as indicated in the chart. This represents a sharp contrast to earlier years, such as 2018 and 2019, when spot trading dominated. The data highlights how the market has matured, with derivatives becoming a critical driver of overall market activity.
Monthly Performance: A Year of Volatility and Growth
In December 2024, spot trading volumes surged by 8.10% to reach a record high of $3.72 trillion, driven by volatility in the digital asset market following Bitcoin's all-time high of $107,000. Derivatives trading also saw record volumes in December, increasing by 7.33% to reach $7.58 trillion. However, despite this growth, the market share of derivatives trading declined slightly to 67.0% from 67.2% in November, marking its lowest level since June 2022.
Analyzing the monthly performance of the crypto market in 2024, it is clear that the trading volumes were consistently high throughout the year. The monthly spot and derivatives volumes fluctuated but remained robust, with notable peaks in March, November, and December. The derivatives market share also maintained a strong presence, hovering around 66% to 74% throughout the year.
2024 commenced with robust trading activity, reaching $5 trillion in January. While February saw a slight dip, the market remained resilient. March witnessed a surge to over $9 trillion, followed by a period of steady trading between $4 trillion and $6 trillion from May to October. A significant rally in November pushed volumes to $10 trillion, and the year concluded with strong December activity at approximately $11 trillion.
Key Takeaways
In addition to the notable upward price movements and increased trading volumes, the data above underscores a crucial shift in the crypto market - the growing dominance of derivatives trading. While spot trading remains significant, derivatives consistently account for a larger share of the overall trading volume. This trend suggests a growing preference among investors for leveraging their exposure to the crypto market through options, futures, and other derivative products.
Originally published at Substack.
