Latest data show that, although cryptocurrencies The Q2 2022 market crashed was witnessed, but digital assets showed some recovery in Q3 despite the continuing bearing market conditions. CoinGecko has published a third-quarter report
CoinGecko reported that this recovery was evident based on the fact the cryptocurrency market has increased its market capital from $903 million in July to $1.2 billion in August.
Despite its struggles in Q3, Bitcoin managed to outperform traditional commodities like gold, oil, and other traditional assets. The exception being the US Dollar Index (DXY), that tracks the greenback’s exchange rate against major currencies. But, Bitcoin experienced the greatest loss of -58% in YTD (year to date) compared to other asset classes. According to CoinGecko data, the cryptocurrency plummeted more than 58% over the past year and currently hovers around $19,113.66 per currency. While Bitcoin trades almost in lockstep to US equities, it has vastly recovered when compared to Q3’s equities market.
Data from CoinGecko has also disclosed that the Decentralized Finance (DeFi) market recovered by 31% in the third quarter, from $54.66 billion it was on July 1 to stand at $63.02 billion as of August 23 2022. Data from CoinGecko revealed that the DeFi market lost 68.13%, or $155.79 billion, in Total Value Locked in 2022’s second quarter.
The crypto market’s steady but slow recovery can be attributed to Ether, the native token of Ethereum blockchain. Even though Ether (ETH), has fallen 33% to $1330 from its quarterly peak in mid-August but is still up 26% compared with Q2. 35.44 billion is the Ethereum blockchain, which accounts for 56.24% of all the TVL in crypto today.
According to data, DEXs (decentralized Exchanges) maintained their position as the largest component in DeFi. They also saw a significant increase in market share, rising 36.8% to $10.9 million. The Merge narrative and the popularity of liquid staking have fueled an increase in trading volume. Lido, the market leader for liquid staking, increased 264% to $1.60 in the 3Q.
According to CoinGecko data, non-fungible token sales dropped substantially in the third quarter. This is due to crypto investors struggling with the ongoing “crypto Winter” and the demand for highly speculative assets that show little sign of coming back. The NFT market took a severe hit in the last quarter. It saw a -77% drop in trading volume across all five NFT marketplaces: OpenSea. Magic Eden. LooksRare. X2Y2 and CryptoPunks.
MagicEden was the only NFT market that saw growth in September. It doubled its MoM volume, and dominated the market while its competition continued to fall. With its recent expansion into the Ethereum blockchain and the launch of its headline-grabbing y00ts NFT collections, MagicEden gained significant dominance (from 9% → 22%) in 3Q. OpenSea’s market share is being eroded by the Solana-based NFT market, now at 60%. This compares to 90% in Q3. However, it remains to see if MagicEden can keep up the momentum.
In the third quarter, the stablecoin market’s valuation fell by 3% to $156.7 billion from $152 billion. Tether (USDT), USD Coin(USDC), Binance USD/BUSD (BUSD), Dai, DaI and Frax are the five major stablecoins. These coins have continued to maintain their positions without any new entrants or changes in their order.
Data showed interesting changes in market cap among the top 5. USDC fell 16% or $9 Billion after the US Office of Foreign Assets Control imposed sanctions against Tornado Cash. BUSD saw the largest market growth, with USDC increasing 18%, or $3 billion, due to inflows from USDC. This was triggered by Binance’s announcement about BUSD auto-conversion. USDT A slight increase was also observed, possibly due to the absorbtion of some of USDC’s sales.
As September came to a close, USDT had surpassed $68billion, USDC was at $49.39billion, and Binance USD (BUSD), increased its market cap by $21.63billion to $21.63billion.