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CEX Trading Volumes Show Nearly Triple Increase Since October 2023: Bybit

The Institutional Report 2024 from Bybit showed a significant increase in monthly trading volumes across multiple centralized exchanges (CEXs) between October 2023 and March 2024. During this period, the market cap of the crypto sector rose from slightly above $1 trillion to over $2.5 trillion.

The report highlighted bullish trends and BTC’s role as a hedge. According to the report, OKX’s trading volumes surged by 278%, with Binance following closely with a 239% increase. Bybit Exchange experienced a remarkable 264% growth, while Coinbase saw a 193% uptick in volumes.

The growth in CEX volumes was mainly attributed to BTC’s price surges and the approval of spot Bitcoin ETFs in the U.S. The report also indicated bullish trends in the derivatives market, particularly for BTC and ETH. Despite some sideways movements in March and April, investors showed optimism with a large call premium for BTC and ETH futures contracts.

BTC and ETH have correlations with traditional financial assets below 3%, making them an attractive hedge in traditional finance portfolios. Allocation of 5% to BTC and ETH can improve risk-adjusted returns, with the potential to increase the Sharpe ratio by 43.6%.

Additionally, challenger chains, like Solana (SOL), have been performing well and VC funding in the crypto industry has seen a resurgence. The report highlighted investments in various sectors, including gaming and AI projects. In Q1 2024, there were 243 venture capital deals with disclosed funding totaling $1.94 billion.

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