Bitcoin had a wild weekend and that translated into record-breaking volumes.
- Bitcoin, the red-hot digital currency known for its volatile price swings, was on a wild ride this weekend.
- Bitcoin crashed more than 25% from its all-time high of $7,721 set Wednesday to a low of $5,617 per coin on Sunday, according to data from cryptocurrency watcher CoinDesk.
- Bitcoin cash, on the other hand, propelled to a record-high of $2,500 early Sunday morning.
- Trading volumes on Sunday peaked at over $26 billion, according to cryptocurrency data site CoinMarketCap.com.
- That's higher than the 5-day average trading volume for some US equity exchanges.
Bitcoin, the red-hot digital currency, had a wild weekend and that appears to have translated into record-breaking trading volumes across the cryptocurrency market.
Bitcoin crashed more than 25% from Wednesday's all-time high to a low of $5,617 Sunday. Bitcoin cash, the rival clone of bitcoin, witnessed an impressive rally that propelled the coin to a record-high of $2,500 early Sunday morning.
The 24-hour trading volumes for cryptocurrencies reached a record above $26 billion on Sunday, according to data site CoinMarketCap.com, the highest ever.
To put that in perspective, that is higher than the 5-day average trading volumes for two US stock exchanges. Both IEX, the upstart exchange based in New York, and the Chicago Stock Exchange averaged less than $10 billion in trading each day for the last five days, according to data by Cboe Global Markets.
IEX saw $7.8 billion worth of shares exchange on its venue, whereas CHX facilitated $3.1 billion in stock volumes.
New York Stock Exchange and Nasdaq, on the other hand, saw more than $50 billion worth of shares exchange daily on average over the last 5 trading days.
Still, the record cryptocurrency volumes over the weekend indicate the growing interest in the red-hot market, which until very recently has rarely witnessed daily trading volumes over $10 billion.
In a recent note to clients, Bank of America Merril Lynch said higher cryptocurrency volumes could present a $1.6 billion opportunity for Wall Street.
The figure is based on the assumption that cryptocurrency volumes end up at about 10% of current fiat currency trading volumes. Here's the bank:
“The FX market is highly liquid. For example, spot FX volumes were $1.65tr as of the most recent BIT Triennial survey in April 2016. If these volumes were to materialize, with the same relationship between spot market and futures, and the same revenue per contract, the revenue pool would be about $1.6bn.”
Already, exchange giants Cboe and CME are looking to capitalize on the nascent space. They are preparing to launch bitcoin futures products in the near term.
Higher volumes, according to Bank of America, could help legitimize cryptocurrencies across Wall Street, which still remains widely skeptical of their credibility.
Many top Wall Streeters have derided bitcoin, for instance, as a vehicle used mainly by criminals.
In an interview with Bloomberg News, Larry Fink, the head of the largest investor in the world, BlackRock said the explosive growth of bitcoin points to “how much money laundering is being done in the world.”
And JPMorgan CEO Jamie Dimon once said bitcoin was only useful for murderers and drug dealers.