The price of Bitcoin (BTC) has increased from $9,088 to $11,800 since July 1 by more than 30%. With it, the volume of top-tier cryptocurrency exchanges has surged to a staggering $334 billion.

A report from CryptoCompare released by Bitcoin futures exchange BitMEX says:

“In July, Top-Tier volumes increased 42.1% to $334bn while Lower-Tier volumes decreased 38.1% to $224bn. Top-Tier exchanges now represent 60% of total spot volume.”

The $334 billion figure does not account for the so-called “lower-tier” exchanges, as described by the researchers.

The volume of top-tier exchanges continues to grow. Source: BitMEX, CryptoCompare

Derivatives market continues to grow as spot market remains stagnant

According to the data, the cryptocurrency derivatives market is growing at a faster rate than the spot market. In July, derivatives volume spiked by 13.2%, while spot volume declined. The report reads:

“Derivatives volumes increased 13.2% in July to $445bn. Meanwhile, total spot volumes have decreased by 0.5% to $639.1bn. As a result, derivatives have continued to gain market share and represented 41% of the market in July (vs 38% in June).”

The trend demonstrates the growing demand for cryptocurrency futures and options contracts, which are typically sought out by professional and full-time traders.

The data could be analyzed in two contrasting ways. It could mean that there is an overall increase in demand for Bitcoin from traders or the market is reaching an overheated territory. When the futures market becomes the primary catalyst of the Bitcoin market, it can increase the chances of a major spike in volatility. 

Since futures contracts are leveraged, and top-tier exchanges provide up to 100x leverage, the chances of a long squeeze could increase if the spot market is not sufficiently complementing the futures volume.

For now, the researchers explained that the spot market volume is climbing in tandem, albeit at a slower rate. The researchers noted:

“Spot volumes have picked up again towards the end of July amid the current market bull run. Following the July update to CryptoCompare’s Exchange Benchmark Ranking, the data shows that higher risk exchanges have generally dwindled in volumes, as users begin shifting to lower risk (Top-Tier) exchanges.”

Whether the spot volume and general mainstream awareness are sufficiently high to catalyze a Bitcoin price breakout above a major resistance level at $12,500 remains uncertain.

The weekly chart of Bitcoin. Source: TradingView.com

The popularity of Bitcoin grows

On Aug. 14, TradingView revealed that Tesla was the most viewed asset in America on the platform. A close second was Bitcoin, which gained 60% since January. TradingView said:

“Tesla stock is the most viewed asset in America. Our data shows that throughout July, Tesla was the most viewed stock in 31 states. Bitcoin was not far behind. Since the start of the year, Tesla’s stock has almost tripled in price. Meanwhile, Bitcoin is up 60% year-to-date.”

While the spot volume lags behind, futures volume and the popularity of Bitcoin among retail traders are seemingly rising.

All-time high hash rate

On Aug. 16, the total hash rate of the Bitcoin blockchain network officially hit a new all-time average high at 129.07 million terahash per second.

A rising hash rate, so close to the last halving in May, indicates a stable mining industry and miners’ expectations in higher Bitcoin prices in the future. 

The confluence of an overall increase in cryptocurrency market volume, the popularity of Bitcoin among retail traders, and rapidly-rising hashrate could contribute to the continuation of the current uptrend in Bitcoin price.