January 2021 was a reasonably exciting month for Bitcoin trading across all major platforms. A significant volume spike is visible, which may coincide with Tesla’s purchase of BTC. Making history repeat itself will prove challenging, however. 

Bitcoin Trading Spikes In January

Looking at the top centralized exchanges, it is always challenging to determine how well they are doing. Although the publication of trading volume is a positive step, no one can verify if these numbers add up. Even so, the month of January 2021 yields astounding numbers, as well as a massive influx of new BTC buyers. 

In the chart below, one can see last month is a clear outlier. It depicts trading volume for BTC-USD, unlike anything that has happened before. Such a substantial spike is crucial, as it marks a significant milestone for the entire industry. It is the first time in at least two years there is over $100 billion in trading volume across these platforms combined. 

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BlocDesk BTC Volume January
Source: Kaiko

What is interesting is how this spike affects all platforms in some way. Although Bittrex, Itbit, Gemini, and LMAX do not see stellar growth, they too try to push the envelope. That said, the most significant increase affects Bitstamp, Coinbase, and Bitfinex. Kraken notes a healthy spike along with the others, even though many people tend to forget this exchange exists.

As the volume picks up across all of these platforms, one has to wonder what took place. This week, there’s the news of Tesla buying $1.5 billion in BTC. It seems unlikely such a company would use centralized exchanges for that purpose. Some of its purchases may come from Coinbase or Gemini, for example, but not the whole amount. Large trading often occurs through OTC trading desks. 

Such a spike in Bitcoin trading volume gets many people excited. After all, it is a near 250% increase in volume compared to December 2020. Sustaining such a growth rate poses many challenges, as it creates certain expectations that may not always be realistic. February looks to be on par with December, albeit it is too early to conclude.

An Ongoing Trend

An increase in Bitcoin trading volume is not entirely surprising. According to CoinGecko, the overall volume for trades has evolved in the past months. Days of sub-$50 billion in trading are less common than they were in Q4 2020. Instead, $50 billion and more seems to be the new normal. Reaching $90 billion more is still an exception but can happen from time to time.

BlocDesk Bitcoin Trading Jan 2020
Source: CoinGecko

Today appears to be a good day to trade Bitcoin against anything else. With over $87 billion in volume already, a new daily record may occur. Over the past 60 days, the highest daily volume was $178.894 billion on January 4th. Eight days later, $111.691 billion worth of Bitcoin trading volume materialized.

These statistics confirm Bitcoin is in a better place now than it was a while ago. If the Bitcoin trading volume keeps rising, one can assume the price per BTC will do the same. After breaking a new all-time high in the past 24 hours, some volatility is likely to occur. The path to $50,000 per BTC is wide open, but there will be some resistance to take care of first.