The crypto market has been thriving since the start of this year. Based on the CoinGecko 2023 Q1 crypto industry report published on April 18, the market seems to have awakened from its end-2022 slumber to eliminate the bears. The crypto market cap increased from $831.8B on January 1, 2023, to $1.238T on March 31, 2023, representing a 48.9% surge.
While these gains were not smooth the entire time, the bull run reversed losses that were recorded in the abrupt FTX implosion, pushing the market to highs seen only before the Ethereum Merge. Bitcoin (BTC) and Ethereum (ETH) are hovering around $29,000 and $1,950 respectively, with Bitcoin performing impressively, gaining about 72% this quarter.
The Crypto Market Awakened In Q1 2023
The entire crypto market has enjoyed the latest upside momentum, with a general upsurge of 48.9% that has pulled it back above the $1.2 trillion level.
Notably, there has been a 30% increase in the daily trading volume quarterly. This is a great recovery since it had contracted by around 33% in Q4 2022.
Market data and information shows that the recovery happened instantly, in January 2023, as soon as the entire crypto market began to rise. February was a major consolidation month before crypto rose once more at the beginning of March, and later faded at the end of the quarter.
In these circumstances, it is not a wonder that Bitcoin managed to outperform the traditional asset classes, gaining 72.4% in the process. For instance, gold posted a good of +8.4% while the NASDAQ gained +15.7% in the same quarter.
Related: Q2 2022 CoinGecko Cryptocurrency Market Report
The quarter was great for the markets since nearly all major asset classes closed on a positive except for oil, which lost 6.1%. But, oil was one of the only two assets that closed 2022 with considerable growth.
Furthermore, the Dollar Index (DXY) remained relatively unchanged in the first quarter of the year, while the inflation data was a bit cooler than earlier projected.
Notably, the spot trading volume of cryptos surged by 18.1%, with the percentage expansion of DEX services exceeding that of CEX: +33.4 %, versus +16.9 %. Nonetheless, CEXs still service nearly 90% of the global trading volumes.
Although there was a great recovery in Q1 2023, monthly volumes are yet to return to the levels they averaged in the first half of 2022. During the release of this report, Bobby Ong, COO and co-founder of CoinGecko, commented:
“The crypto market rallied in Q1 of 2023, recouping losses from FTX’s collapse. With innovation and adoption still, at healthy levels, the industry seems to have overcome the worst of this cycle’s bear market. Of course, there still are headwinds on the regulatory and macroeconomic fronts, but the year is off to a promising start and we look forward to seeing what’s next.”
Blur Outperformed OpenSea
A lot has also happened in the nonfungible token (NFT) space. Another major development worth noting is that Blur managed to overtake OpenSea as the top NFT marketplace.
Generally, the NFT trading volume increased by 68% from $2.1 billion in the last quarter of 2022 to $4.5 billion in Q1 2023.
A majority of this volume came from Blur, a new NFT platform unveiled in October 2022. Within six months, it has managed to challenge the dominance of OpenSea, surging from a market share of 52.8% in December 2022 to a 71.8% market share at the end of March 2023. On the other hand, OpenSea’s market share plunged from 29.3% to 21.7%.
Solana went on the contrary to the trend. While many of the other chains recorded some growth in NFT trading volumes in Q1 2023, it dropped on Solana.
Related: The Many Uses of NFTs – A Roundtable Discussion
For instance, Magic Eden, the biggest marketplace on Solana, recorded a decline in its trading volume from $73.9 million in December 2022 to only $23.6 million in March 2023. That translates to a drop of 67.9%.
On the flip side, the incredible growth of Ethereum’s Layer 2, and specifically Polygon, makes it less obligatory to turn to blockchains that are cheaper than Ethereum.
Stablecoins Are Losing
Despite the solid growth in the crypto space in Q1 2023, the stablecoins lost market capitalization. The loss was $6.2 billion (4.5%), and concentrated on BUSD and USDC.
On the contrary, USDT defied the stablecoin market trend gaining $13.6 billion representing a 20.5% growth. On its part, USDC lost 26.9% of its market cap while BUSD dropped by up to 54.5%.
Apart from USDT, another gainer was True USD (TUSD). The TUSD gains pushed it into the top 5 stablecoins list, overtaking FRAX. Its market cap in Q1 2023 increased by 169.3%.
DeFi Recorded Growth
The decentralized finance (DeFi) market also recorded an impressive rebound after its negative peaks in late 2022.
DeFi tokens recorded a market cap growth of $29.6 billion (+65.2%), underpinned mainly by liquid staking, which exploded by up to 210.9%. From that data, it means that liquid staking is now the third most valuable asset in the DeFi space, exceeding even the lending protocols.
DEX governance tokens continued losing market share in Q1 2023, despite growth in the DeFi space, recording a general loss of 5%.
