The recent SEC lawsuits have been damaging to the industry and have severelyimpacted volumes and liquidity across all markets, with spot trading volume falling21.8% to $495bn in May, recording the lowest monthly trading volume since March2019. In this report, we explore how recent regulatory scrutiny has impacted the digital asset markets.

Key Takeaways

• Derivatives market share continued to rise for the third consecutive month to 79.8%, hinting at the speculative nature of the market at present.
• Currently, the aggregate liquidity for Bitcoin (BTC) stands at approximately 3,400 BTC (for 14 analysed exchanges), a 53.4% decrease from its peak prior to the FTX collapse on October 25th and a 40.8% decrease compared to the beginning of 2023.
• 1% market depth on U.S. exchanges has notably dropped from 1,500 BTC to 400 BTC, possibly due to regulatory and macroeconomic pressures.