The cryptocurrency market saw a broad correction in July 2025, with most on-chain and exchange trading metrics declining from previous highs. Despite this pullback, key trends emerged—most notably Ethereum’s continued deflationary pressure, USDT’s expanding dominance in stablecoin transactions, and Binance maintaining a commanding lead in spot trading volume. This comprehensive review breaks down the month’s most critical data points, offering insights into market dynamics, user behavior, and long-term implications.
Chain Transaction Volume Trends
Decline in BTC and ETH On-Chain Activity
July marked a significant slowdown in on-chain transaction volumes across major blockchains. The total adjusted on-chain volume dropped by 16.9% to $188 billion, according to The Block's research. This decline was driven primarily by reduced activity on both Bitcoin and Ethereum networks.
- Bitcoin (BTC): On-chain volume decreased by 13.1%
- Ethereum (ETH): Saw a sharper decline of 21.9%
This reduction reflects lower user engagement, potentially due to macroeconomic uncertainty and reduced speculative trading. However, it's important to note that lower transaction volume doesn't necessarily indicate weakening fundamentals—many long-term holders continued accumulating during this period.
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Stablecoin Transaction Volume Also Down
Stablecoins, often seen as the lifeblood of crypto trading and cross-border value transfer, also experienced a downturn:
- Total stablecoin transaction volume: $487.8 billion, down 12.3%
- Aggregate stablecoin issuance: $117.7 billion, a slight decrease of 1%
- Tether (USDT) increased its market share to 71.5%
- USD Coin (USDC) dropped to 20.9%
This shift underscores growing confidence in USDT despite regulatory scrutiny, while USDC continues to lose ground amid broader trust concerns in centralized issuers.
Ethereum’s Deflationary Momentum Builds
ETH Supply Now Shrinking Monthly
One of the most significant developments in July was Ethereum’s sustained deflationary trend—a direct result of the EIP-1559 upgrade that introduced fee burning.
- In July alone, 82,846 ETH (~$156.7 million) were burned
- Every month in 2025 has seen more ETH burned than issued
- Since EIP-1559’s implementation, over 3.51 million ETH (~$10.04 billion) have been permanently removed from circulation
This structural shift means Ethereum is no longer inflationary by default. As network usage increases—even modestly—the deflationary pressure intensifies, potentially creating upward price pressure over time.
Daily Burn Data Shows Consistent Network Usage
While NFT activity cooled, core Ethereum usage remained resilient. Daily gas fees continued to generate substantial burn rates, indicating consistent DeFi interactions, token swaps, and smart contract executions—even during bearish sentiment.
NFT Market Cools on Ethereum
Trading Volume Drops 20%
The Ethereum NFT market saw a 20.4% decline in trading volume, falling to $425 million in July. This follows broader market risk-off behavior and reduced speculative interest.
Despite the drop:
- Blur extended its lead over OpenSea for the sixth consecutive month
- However, concerns persist about wash trading inflating reported volumes
Critics like prominent NFT collector Pranksy have pointed out that Blur’s dominance may be artificially boosted by token incentives encouraging fake transactions—an issue that continues to challenge data integrity in the NFT space.
Centralized Exchanges: Binance Maintains Dominance
Spot Trading Volume Hits Multi-Year Low
Overall centralized exchange (CEX) spot trading volume fell to $269.1 billion, the lowest level since October 2020. This reflects reduced liquidity appetite and trader caution amid regulatory uncertainty.
Yet within this shrinking pie, market share concentration increased dramatically.
Binance Controls Over 70% of Spot Market
Despite ongoing legal challenges—including reports of potential fraud charges from U.S. prosecutors—Binance retained an overwhelming grip on spot trading:
- Binance: 70.6%
- Coinbase: 10.8%
- Kraken: 5%
- BTSE: 4.6%
- LMAX Digital: 3%
This level of centralization raises concerns about market resilience and fair competition but also highlights Binance’s global reach and operational efficiency.
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Derivatives Market: Futures Volume Slumps
BTC and ETH Futures See Sharp Declines
Crypto derivatives markets also cooled significantly:
- BTC futures volume: $637.2 billion, down 27.1%
- ETH futures volume: $312.6 billion, down 25.2%
- BTC open interest dropped 8.4%, while ETH held steady
These figures suggest traders are reducing leverage exposure, possibly in anticipation of macroeconomic volatility or regulatory developments.
CME Shows Mixed Results
The Chicago Mercantile Exchange (CME), a key barometer for institutional sentiment, reported diverging trends:
- BTC options open interest: Fell 38.6%
- BTC monthly options volume: Dropped to $18.9 billion (–16%)
- Meanwhile, ETH options volume rose 8.1% to $10.7 billion
This divergence could signal shifting institutional priorities—possibly rotating toward ETH as a more deflationary and programmable asset.
Frequently Asked Questions (FAQ)
Q: Why is Ethereum considered deflationary now?
A: Since the EIP-1559 upgrade, a portion of every transaction fee is permanently burned. When network activity causes more ETH to be burned than newly issued through staking rewards, the net supply decreases—making ETH deflationary.
Q: How does USDT maintain such high market share?
A: USDT’s dominance comes from wide availability across exchanges, strong liquidity, and acceptance in emerging markets. Despite regulatory questions, its utility keeps demand high.
Q: Is Binance’s market share sustainable amid legal issues?
A: While legal risks remain, Binance’s global infrastructure, low fees, and diverse product offerings continue to attract users. Regulatory outcomes will determine long-term sustainability.
Q: What does declining futures volume indicate?
A: Lower derivatives volume often signals reduced speculation and leverage use, which can precede market bottoms or extended consolidation phases.
Q: Why did ETH options volume rise while BTC’s fell?
A: Institutions may be viewing Ethereum as increasingly attractive due to its deflationary mechanics, upcoming protocol upgrades, and growing use in DeFi and Layer 2 ecosystems.
Q: Should investors worry about NFT wash trading?
A: Yes—widespread wash trading distorts volume data and can mislead investors. Always verify NFT project fundamentals and look beyond headline metrics.
Final Thoughts
July 2025 painted a picture of consolidation across the crypto landscape. While overall activity cooled, structural trends—like Ethereum’s deflationary trajectory and stablecoin centralization—became more pronounced. Binance’s resilience despite legal headwinds underscores the complexity of regulating global crypto platforms.
For investors and analysts, these data points highlight the importance of looking beyond short-term volatility to understand underlying network health and economic models.
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Core Keywords: Ethereum deflation, USDT market share, Binance spot volume, EIP-1559 burn, stablecoin transaction volume, crypto derivatives market, on-chain data analysis