In this article we examine CoinGecko latest report on the state of the crypto industry in Q2 2023, with an in-depth look at the world of NFT.
What are the key trends emerging and the most important aspects to watch in the second quarter of this year?
All the details below.
The general report on the crypto industry in Q2 2023
CoinGecko report on the state of the crypto and NFT industry showed that Q2 2023 brought a lot of news to the industry, changing previous dominance scenarios.
Going in order, we can see that in Q2 2023 BTC closed with a gain of 6.9%, outperforming the market that increased by 0.14 % in capitalization from $1.238 trillion to $1.240 trillion.
On the stablecoin front, we see how their spread in the markets decreased by 3.5%, with USDC and BUSD being the main losers: In total, the marketcap of stablecoins decreased by $4.6 billion (-3.5%)
Tether, on the other hand, stands as the exception to the rule, as the USDT coin added 4.4% to market capitalization, in an increase of $3.48 billion.
A niche that is definitely growing, according to Coingecko’s report, is ETH staking, which grew 30.3% in Q2 2023 after the Shapella update enabled withdrawals to the Beacon Chain. A total of 5.6 million ETH were added to the staking platform, for a total of 23.6 million coins.
In this context, Lido has flexed its muscles, establishing itself as the leading provider for liquid staking of ETH. The protocol now holds 31.9% of all ETH put into staking.
Another factor to pay attention to is the crisis in centralized exchanges, whose overall spot volume declined by 43.2% in the last quarter.
Despite the small positive signs shown in Q1 2023, the number of trades and the total value transacted remains low when compared to the bull market months of 2021.
Binance confirms its dominance in the industry, though it is seeing its market share drop from 61% to 52%.
Huobii and Crypto.com also suffered heavy downsizing, dropping out of the top 10 exchanges by registered volume, making way for Bybit and Bitget.
Finally, the last focal point of Congecko’s crypto analysis is the context of decentralized exchanges.
While experiencing significant increases with the advent of PEPE that drove the memecoin craze, decentralized exchanges have not been able to overcome the obstacle of low liquidity and lack of investor attention.
Better times will come for this segment of decentralized finance.
Coingecko: crypto report focus on NFT
The topic of NFTs was examined in great detail in Coingecko’s crypto report.
During the second quarter of this year, volumes in the non-fungible tokens market saw a sharp drop of 35% from $4.84 billion in the first quarter to the current $3.15 billion.
The Ordinals trend, which has also brought many benefits to Bitcoin miners who have seen their earnings increase, has failed on its own to lift the overall situation of the NFT sector.
Indeed, the latter suffers from the lack of an overall positive outlook, which could boost speculation on this type of asset class, now forgotten by a large number of investors.
If we take a look at the floor prices recorded in the most popular collections on Ethereum, such as Bored Ape Yacht Club or Crypto Punks, we realize the huge drop in prices compared to the values of 2021, where the market for non-fungible tokens was skyrocketing.
Below is a tweet from well-known collector Franklin and BAYC brand advocate showing how anything has gone wrong in the last period.
Against the disastrous backdrop highlighted by Coingecko’s crypto report, the Ethereum blockchain can still boast dominance in NFT trading in Q2 2023.
83% of the total volume was recorded on the main smart contract infrastructure, with several ups and downs seeing it touch 73.3% as of May 2023.
Solana, on the other hand, stands as the biggest loser in this particular niche, having lost about 78.6% of volume, falling from $184.91 million in Q1 to the current $39.66 million.
The main reason for this negative flow likely relates to the migration of the chain’s main NFT collections, namely DeGods and y00ts to Ethereum and Polygon.
As for Bitcoin, whose exposure in the NFT scene was completely absent prior to the advent of Ordinals and the BRC-20 standard, it can now boast the second position in the chain ranking in terms of monthly recorded volumes.
As is shown by Coingecko’s crypto study, in May 2023 the trend peaked, with a total value traded on Bitcoin of $196 million.
Although the total amount traded has now decreased, we could expect pleasant surprises in the context of NFTs on Bitcoin given the growing interest on the part of developers in making this world increasingly concrete and competitive with Ethereum.
Vitalik Buterin, founding father of the quintessential decentralized application platform, also believes that the development of alternatives such as protocols for NFTs or layer 2 scaling solutions on Bitcoin (in general the “builder culture“) are excellent initiatives that can bring huge future benefits.