Bitcoin trading volume tumbled to a two-year low in March 2019 as the industry was in the midst of a prolonged crypto bear market.
Cryptocurrency exchanges reacted by raising trading fees, according to TradeBlock, a provider of trading tools for digital currencies.
The fee hikes are not surprising because it’s a defensive maneuver to protect against dwindling revenues from falling trading volumes.
“In 2018 and early 2019, prices contracted and trading volumes declined significantly from their peak. On average, exchanges raised fees on both the maker and taker sides in 2018 and 2019.
“An increase in trading fees is in line with expectations that exchanges are looking to protect revenues, amidst continually dampened trading volumes.”
![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fwww.ccn.com%2Fwp-content%2Fuploads%2F2019%2F04%2Fbitcoin-trading-volume.jpg&t=665&c=pw5oGo7KtW2F5w)
Bitcoin trading volumes plunged as the bitcoin price tanked during the Crypto Winter. (TradeBlock)
Trading Fees Rose as Trading Volume FellTradeBlock pointed out that crypto exchanges decreased fees in 2015 and 2016 when trading volumes rose. However, fees remained stable in 2017 as trading activity spiked to record highs during the bitcoin bull market.
“Exchanges lowered fees in 2015 and 2016 while volumes slowly began increasing.”
“In 2017, exchanges, on average, held fee schedules unchanged as trading activity rose to all time highs. However, as volumes have continued to decline, exchanges began raising fees in 2018 and 2019.”
Now that the bitcoin price is starting to rally, it remains to be seen whether exchanges will reduce fees again as competition for market share heats up.
Reference:
https://www.ccn.com/bitcoin-volume-sank-2-yr-low-march-price-cratered-75