A new year brings new beginnings as the crypto market awoke from its hibernation at the end of 2022 to shake off the bears, rising 48.9% from a total market cap of $831.8 billion on January 1, 2023 to $1,238T on March 31, 2023. it wasn’t quite all the way, this run reversed losses stemming from FTX’s collapse, bringing the market back to pre-Ethereum merger heights. Prices of Bitcoin (BTC) and Ethereum (ETH) are now hovering around $28,000 and $1,800 respectively, with BTC performing particularly well, gaining nearly 72% this quarter.
Our comprehensive 2023 Q1 Crypto Industry Report covers everything from the crypto market landscape to analyzing Bitcoin and Ethereum, deep dives into the decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, and reviews how centralized exchanges (CEX) and decentralized exchanges (DEX) have acted.
We’ve recapped the major highlights, but be sure to dig into the full 44 slides below.
1. The crypto market is off to a strong start, up 48.9% to $1.2 trillion
The crypto market is off to a strong start in 2023, having ended Q1 with a total crypto market cap of $1.2 trillion. Compared to its performance in 2022 where it ended the year at $829 billion, this reflects a gain of 48.9% or $406 billion in absolute terms.
Meanwhile, average daily trading volume also picked up, having increased 30% QoQ from -33% in 2022 Q4 to a total of $77 billion in 2023 Q1. Trading volume picked up in January 2023, when the market started to recover. It then spiked briefly in early March due to increased volatility from the banking crisis, before tapering off at the end of March, when Binance removed part of their zero-fee trading incentives for BTC.
2. Bitcoin outperformed traditional asset classes, posting a 72.4% gain
Bitcoin was the best performing asset in the first quarter of 2023, with a gain of 72.4% QoQ, followed by NASDAQ index (15.7%) and gold (8.4%).
All major asset classes ended the quarter in the green, except for crude oil which fell -6.1%. This outcome was not surprising, as crude oil was one of only two assets to end 2022 on the up. Crude oil initially fell as low as -17.2% due to a US inflation report citing a reduction in oil demand, on top of the US banking crisis – but managed to pare these losses by the end of March.
The US dollar index (DXY), along with other fiat currencies, remained relatively flat during the same period, the result of cooler-than-expected inflation data.
3. Stablecoins lose $6.2 billion or 4.5%, with USDC and BUSD the biggest losers
The top 15 stablecoins saw its market cap drop by 4.5% ($6.2 billion) due to Paxos’ shutdown of Binance USD (BUSD) and the short USD Coin (USDC) depegging event during SVB’s collapse.
Already the largest stablecoin, Tether (USDT), further strengthened its foothold, adding 20.5% ($13.6 billion) to its market cap. USDC and BUSD had losses of 26.9% and 54.5%, respectively, erasing the gains of 2022.
Meanwhile, True USD (TUSD) entered the top 5 stable coins and overtook FRAX. Binance minted $130 million TUSD, while Tron minted a further $750 million, driving its market cap to grow by 169.3%. As for stablecoins outside the top 5, GUSD and USDP fell 32.0% and 12.3% respectively.
4. DeFi ecosystem surged 65.2% to $29.6 billion, supported by liquid staking sector up 210.9%
The market capitalization of the decentralized finance (DeFi) sector increased by 65.2% in 2023 Q1, amounting to $29.6 billion in profits, mainly driven by liquid stake management token performance.
With the confirmation of Ethereum’s Shapella upgrade, liquid staking management tokens saw a 210.9% increase in market cap in Q1. It has now surpassed lending protocols to become the third largest category in DeFi.
Despite growing 44.3% in market capitalization in the first quarter of 2023, decentralized exchange (DEX) management tokens continued to lose market share, falling -5% since January.
5. NFT trading volume saw a resurgence to $4.5B, with Blur overtaking OpenSea as the top NFT market
NFT trading volume picked up significantly, rising 68% from $2.1 billion in 2022 Q4, to $4.5 billion in 2023 Q1.
The majority of NFT trading volume comes from Blur, a new NFT platform launched in October 2022. Within six months, it dethroned former market leader OpenSea, growing its market share from 52.8% in December 2022 to 71.8% in March 2023, and currently dominates the top 6 NFT marketplaces. Meanwhile, OpenSea’s market share shrank from 29.3% to 21.7% over the same period.
While most chains saw an increase in trading volume in Q1, Solana’s ecosystem languished. Magic Eden, the largest marketplace on the network, saw its trading volume drop from $73.9 million in December 2022 to $23.6 million in March 2023, a decrease of 67.9%. Prominent collections y00ts and DeGods also migrated to other chains, dealing a further blow to Solana.
6. Crypto spot trading volume rose 18.1% to reach $2.8T in Q1, with DEXs outpacing CEXs quarterly growth
Spot trading volume across the top 10 crypto exchanges totaled $2.8 trillion for 2023 Q1, representing an 18.1% increase from 2022 Q4. Monthly trading volume has been on an upward trend since $0.5 trillion lows in December 2022. However, monthly volumes have yet to reach an average of $1 trillion, a figure last seen in the first half of 2022.
Amid the crackdown on CEXs by regulators worldwide, DEXs have seen its growth outpace that of CEXs by nearly two times. DEXs grew 33.4% versus 16.9% for CEXs in 2023 Q1. Despite this, the ratio of CEX: DEX trading volume remained above 90% during the same period.
Read the report: CoinGecko’s 2023 Q1 Crypto Industry Report
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CoinGecko
CoinGecko’s editorial team consists of writers, editors, research analysts and experts in the cryptocurrency industry. We regularly produce and update our articles to provide the most complete, accurate and useful information on all things cryptocurrency. Follow the author on Twitter @coingecko
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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