The cryptocurrency market experienced a notable decline in trading volumes across both spot and derivatives markets in May 2024, marking the second consecutive month of reduced activity. This downturn was primarily attributed to the relatively stagnant price of Bitcoin following its April halving event.

Spot trading volumes on centralized exchanges saw a significant drop of 21.6%, amounting to $1.57 trillion, while derivatives trading volumes decreased by 19.4% to $3.69 trillion. Despite the overall decline, the derivatives market's dominance reached its highest level since December 2023, driven by increased interest in Ether derivative instruments following the unexpected approval of spot Ether exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC).

The approval of spot Ether ETFs led to a surge in open interest for Ether derivatives, reaching a record high of $14.0 billion. Meanwhile, Bybit achieved a new all-time high spot market share of 7.36%, although its spot trading volume declined by 12.7% to $116 billion. Binance remained the largest spot exchange, maintaining a 34.6% market share despite a 19.8% decrease in volumes.

In the derivatives market, Binance further solidified its dominance with a 45.4% market share, trading $1.68 trillion in monthly volume. OKX and Bitget followed with market shares of 21.3% and 14.5%, respectively.

The U.S. CME exchange witnessed mixed performance, with overall derivatives trading volume falling by 7.42% to $115 billion. However, ETH futures volumes surged by 37.5% to $20.5 billion, the highest since November 2021, while ETH options trading volume hit a new all-time high of $931 million.

Despite the heightened institutional interest following the SEC's approval of spot Ether ETFs, traders seem to have adopted a "buy the rumor, sell the news" approach, with over $3 billion in Ether position exits observed on crypto exchanges. However, some analysts remain optimistic about Ether's price potential, suggesting a possible break of its November 2021 all-time high once spot Ether ETFs begin trading, potentially fueling increased demand pressure in the market.