2023 reflects a steady rise after CoinEdition

by Arthur · April 19, 2023

The Crypto Market in 2023 Is Erupting Again! With the previous year ending with turbulent lows instead of highs, the new year is ushered in on an optimistic note. The crypto market is making the most of this year, showing massive growth, unveiling airdrops, new projects, token sales and increasing investment activity in Web3.

With the rapid growth in the first quarter of 2023 being compared to the pace of the pre-FTX crash, CryptoRank believes that the tough days of the 2022 market are in the past. That said, Q1 2023 was not without issues: the most worrying came from outside of DeFi, the commotion in Traditional Finance (TradFi).

The banking crisis posed a major threat to the crypto markets. Since crypto is still mostly an investment instrument, the global financial market’s struggle with inflation that could lead to a recession will hurt crypto. The threat can be diverted, but these conditions tend to create a hostile market for crypto in a way. But from another perspective, the challenges of TradFi can also stimulate the use of crypto and trust in crypto.

In this summary of the 1st quarter of 2023, we will review the following:

Convocation of the bull market
The start of the airdrop season
Comeback of DeFi
Trend which is layer 2
Propensity for fundraising
Status of the NFT market

Table of Contents

Convocation of the bull market/t2

After several weeks of volatility from the domino effects that came from the FTX collapse, such as the Genesis panic, the BlockFi bankruptcy, the Galaxy fiasco and many more, we saw continued growth in Bitcoin in January 2023. This growth was followed by an average performance in February and some peaks are offered in March.

Among the top ten performers in Q1 was Bitcoin, along with other notable top 100 projects. The Bitcoin moment was marked by the performance of BTC through the weeks of collapsing banks. It was at this point that BTC marked its dominance as one of the highest points in nearly a year. Next up was Solana, who made a dizzying comeback, having underperformed in Q3 due to his strong ties to FTX. Surprisingly, it showed a 109% rise in Q1. Next in line was Lido, with a growth of 134%. The last was Aptos, with an exemplary increase of 230% in this quarter.

Although several events took place, such as USDC being disconnected from $1, BUSD being banned by the government and the briefcases against crypto firms and entities, the market remained strong. Thanks to the market recovery and strong growth in special ecosystems, many projects showed commendable numbers this quarter. DeFi was one of the best performing categories in Q1 overall, especially decentralized exchanges. Other projects, such as those based on Layer 2 Arbitrum and Optimism blockchains, outperformed others, such as Camelot, Radiant, Capital, Velodrome and Gains Network.

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The start of the Airdrop season/t2

The first major airdrop occurred in February by Blur, one of the largest NFT marketplaces that sent out tokens worth around $300 million. With this action, Blur surpassed OpenSea, the largest NFT marketplace. Mars had even bigger airdrops, as Arbitrum announced its airdrop schedule and the launch of The DAO. With its success, ARB seamlessly entered the top 50 and held a strong position.

DeFi is rising from the dead/t2

DeFi started on the mining path as the market improved. The latest trend in DeFi is liquid staking, which is the key element of Proof-of-Stake networks. Liquid staking has many advantages – it is a significant source of income for thousands of validators and delegators. The Shapella update now enables ETH withdrawals, increasing the popularity of floating stakes. Lido and Rocket Pool (NASDAQ:POOL), the derivative coin, showed outstanding performance in the first months of 2023.

Arbitrum, Solana and Optimism showed a noticeable increase in total value locked (TVL) in Q1 2023 as Ethereum maintained the leading position among the blockchains with a noticeable gap from Tron and others.

In terms of combined TVL, floating stake protocols were the second after DEXs to have surpassed lending and borrowing protocols. A total of over $16 billion in TVL combined was second to DEx’s 759 protocols. This means that the total value-locked value increased by almost 40% since the turn of the year. Protocols based on Layer 2, such as Camelot, Velodrome and Gains Network, saw a significant increase in total value locked. The Lightning Network showed an outstanding performance thanks to the growing use of Bitcoin as a means of payment.

Trading volume for DEXs experienced an increase of approximately 30% in the first quarter of 2023 after two quarters of decline. Moreover, the DEX/CEX ratio has now increased to a level similar to November 2022. It is observed that while the DEX/CEX ratio remains 4% below the January 2022 peak, the growing popularity of blockchain technology may drive this indicator . to new record levels.

The trend that is layer 2/t2

Layer 2 blockchains are projected to gain more traction among crypto users in 2023, with the first attention focused on Optimism, which provided a significant airdrop to the broader crypto audience. After that, Arbitrum gained recognition for its incentive activity called Arbitrum Odyssey. The launch time of these Layer 2 blockchains was impeccable as it came at a time when users were benefiting from the features they offered – all the benefits of Ethereum but with faster transaction times, lower costs and higher capacity.

At the beginning of this year, the Tier 2 landscape changed once again, thanks to the airdrop of Arbitrum. Shortly after the ARB airdrop, zkSync announced the launch of the first zkEVM network, called zkSync Era, which generated a lot of interest and drove transaction numbers to new heights. Subsequently, Polygon launched its long-awaited zkEVM as a mainnet beta. ConsenSys, a major player in the crypto industry, has recently unveiled its public zkEVM testnet, called Linea. Furthermore, Coinbase (NASDAQ:COIN) has launched its own Layer 2 network, known as Base. Although we are still in the early stages of Layer 2 technology, there is great potential for the emergence of new and exciting rollups.

Propensity for fundraising/t2

The trend has gradually reversed for fundraising activities in contrast to the significant drop it experienced after the FTX collapse. In February 2023, token sale activities received a significant boost. This positive trend continued into March, with monthly collections exceeding May. While Initial Exchange Offerings (IEOs) provided the highest returns to token sale participants, Initial Decentralized Offerings (IDOs) were more prevalent. The top 10 projects by current return on investment (ROI) indicate that AI projects performed exceptionally well, with Space ID being one of the top performers on Binance.

Projects on Arbitrum raised the most money through token sales in Q1 2023, mainly due to several successful token sales on Camelot. However, both Binance Chain and Ethereum surpassed Arbitrum in terms of the number of projects that had a public sale during the quarter.

Status of the NFT market/t2

The NFT market is certainly expanding into innovative matters beyond just art and collectibles, although it may not be experiencing explosive growth at the moment. As such, NFT excels in its use to represent ownership of physical assets such as real estate or even carbon credits. In addition, NFTs can be used to create unique experiences and unlock access to exclusive content or events. Therefore, the potential for this technology to disrupt various industries and create new opportunities is still alive.

The post Crypto Market Recap Q1: 2023 Reflects A Steady Climb appeared first on Coin Edition.

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