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2023 Q2 crypto industry report: 4 key insights

CoinGecko’s quarterly report shows that Q2 was a healthy quarter for Bitcoin and Ethereum, but NFTs and stablecoins took a hit.

2023 has been a buoyant year for crypto. In Q1, the total market cap increased by 48.9%, jumping from $831.8 billion in January 2023 to $1.238 trillion in March the same year. Ethereum’s Shapella upgrade was a roaring success, many exciting new NFT projects launched, and Bitcoin outperformed traditional asset classes. 

Q2 hasn’t been quite as bullish, but it hasn’t been bearish by any stretch of the means, with gains still slightly in the green. Data from CoinGecko shows that the total market cap throughout Q2 increased by a slight 0.14%, rising from $1.238 trillion on March 31, 2023, to $1.240 trillion on June 30, 2023. (We’re still talking in trillions, at least.)

Over the past three months, the market has experienced a new wave of optimism as industry giants like BlackRock and Ark Invest file for Bitcoin ETFs. In May, we saw a wave of ‘memecoin mania‘, and NFT marketplace Blur successfully launched its perpetual lending protocol, Blend.

Read more: Bitcoin ETFs: should we be hopeful or worried about the future of Bitcoin?

In spite of developments, it’s also been a rough quarter in terms of regulation (excluding MiCA), with the SEC suing both Coinbase and Binance

Here are four key insights from CoinGecko’s quarterly report

1. Bitcoin was volatile, but it ended Q2 with a 6.9% gain.

Bitcoin had a volatile few months, but it ended the quarter at a 6.9% gain. Data from Trading View shows that Bitcoin hit $31,000 in bullish momentum on June 23 amidst a TradFi push, reclaiming levels last seen in June 2022.

This surge represented a 25% increase from June 15, 2023, which saw lows of around $25,000. 

The Q2 Bitcoin surge was driven by improved sentiment resulting from the wave of Bitcoin ETF filings – most notably on June 15 following BlackRock’s filing. 

CoinGecko data shows that Bitcoin increased from $28,517 to $30,481 throughout Q2. The pioneer cryptocurrency also outperformed the total crypto market cap, which increased by 0.14% during the same period, rising from $1.238 trillion to $1.240 trillion (+$1.7 billion). 

Daily trading volume on the other hand declined by 58.7%, from $33.4 billion in Q1 to $13.8 billion in Q2. 

Q2 also saw Bitcoin strengthen its market dominance, despite May’s memecoin season, increasing by 3.2% up to 47.9%.

2. Stablecoins shrank 3.5%, with USDT increasing its dominance.

15 of the top stablecoins fell by $4.6 billion (-3.5%) in Q2.

USD Coin (USDC) took a hit, with its market cap sliding by $5.18 billion (-15.9%), but Binance USD (BUSD) took the biggest hit, likely due to the slew of legal action taken against the exchange by the SEC.

The market cap of BUSD fell by -45.4% – approximately $3.34 billion.

Q2 was a strong quarter for Tether (USDT), which added 4.4% ($3.48 billion) to its market cap. By June 2023, the stablecoin held an impressive 66% market share. 

The biggest stablecoin gainer of Q2 was True USD (TUSD), which added 50% to its market cap. These gains came after Binance made TUSD its default stablecoin, minting ~$1 billion TUSD on the Tron network. GUSD and flexUSD were also steady gainers, each gaining 44.4% and 33.3% respectively. 

Of the losers, USTC (Terra Classic) suffered the biggest losses, sliding -43%. 

3. Ether gained 6%, and ETH staking increasing by 30.3%

The crypto market teetered on the edge of its seat throughout May and April in anticipation of Ethereum‘s long-awaited Shapella upgrade. The upgrade was a huge step in Ethereum’s transition from proof-of-work to proof-of-stake and it enabled users to withdraw staked Ether for the first time.

Many expressed fears that withdrawals would trigger a sell-off, but this wasn’t the case. 

ETH gained 6% in Q2, hot on the heels of Bitcoin. Following the Shapella upgrade in April, Ether cracked $2000, quelling fears of a sell off. At the time of writing, Ether is trading just shy of $1,900. 

Ethereum staking increased by an impressive 30% throughout Q2, with liquid staking protocols such as Lido leading the way.

Read more: What is Liquid Staking and What are the Benefits?

Lido accounted for 31% of staked ETH in Q2, with Coinbase and Binance accounting for 9% and 5% respectively. Kraken on the other hand saw a 3% decrease, following its settlement with the SEC. 

By the end of Q2, total staked Ether hit 23.6 million, an increase of 5.6 million, showing improved trust in Ethereum as a proof-of-stake network.

4. NFT trading volume dropped by 35%

Q2 saw a 35% decline in NFT trading volume, falling from $4.84 billion in Q1 to $3.15 billion in Q2.

Nonetheless, Ethereum continued to dominate the market, capturing a massive 83% of volume. When Bitcoin Ordinals surged in May, Ethereum’s dominance dropped down to 73.3%. 

Solana suffered substantial losses following the migration of projects such as y00ts over to Polygon and DeGods over to Ethereum. In Q2, Solana’s trading volume plummeted by 78%, from $184.91 million in Q1 to $39.66 million in Q2.

NFT marketplace Blur reigned supreme throughout Q2, despite backlash from the NFT community. 

Since June 2023, Blur has captured a staggering 71.2% of NFT trading volume, in part due to the launch of its NFT lending protocol, Blend. OpenSea’s share of the market decreased, falling from 33% in Q1 to 23% in Q2.

Read more: Blur introduces NFT perpetual lending protocol that lets users ‘mortgage’ blue-chip NFTs

With Blend live, NFT lending increased by 453% from $74 million to $411 million. The most sought after NFTs on loan were Azuki and Bored Ape Yacht Club, capturing 29% and 28% of loans respectively.

Despite their popularity on Blend, the protocol may have inadvertently damaged the floor prices of Azuki and Bored Ape. In Q2, the floor price of Azuki slid by 36%, and Bored Ape took an even bigger loss of 41%. 

Milady Maker made substantial gains in Q2 for two reasons, namely: Blur featured the collection as one of its three features on Blend, and Elon Musk famously tweeted a picture of a Milady meme captioned, “there is no meme, I love you”. 

Milady jumped from 1.1 Ether in April to 5.5 in May, dipping back to a comfortable 3 Ether in June.

Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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