Data says crypto markets corrected in May, while NFT market sluggish
The crypto market experienced a month of extensive corrections, adjustments, slow NFT market activity and more in the month of May, according to on-chain data released by The Block.
A bearish May
In a recent tweet, Lars H., Director of Research at The Block, highlighted the performance of the crypto markets over the past month. The data reveals a mostly corrective phase, marked by fluctuations in on-chain volume, stablecoin supply, mining revenue, NFT market activity and trading volume across various platforms.
According to the researchers, the total adjusted volume on the chain experienced a decrease of 5.3%, to an amount of 196 billion dollars. In particular, bitcoin (BTC) witnessed a significant 13.3% decline in on-chain volume, while ethereum (ETH) managed a modest 3.2% increase.
The adjusted volume of on-chain stablecoins also fell, falling 4.2% to $464.6 billion.
In addition, the issued supply of stablecoins fell by 1.4% to $122.4 billion. Among them, tether (USDT) saw its market share rise to 68.2% and hit a record supply of $83.5 billion, while Circle’s USD coin (USDC) experienced a 22.2% decline in market share.
In the bitcoin mining space, miners had a lucrative May, as earnings rose 13.7% to $916.6 million. However, ethereum players faced a decline in revenue, witnessing a significant drop of 34.5% to $157.2 million.
In May, a total of 204,576 ETH, equivalent to $380.1 million, was burned. This ongoing deflationary trend has been in effect since January 2023.
On-chain data also shows that since the implementation of Ethereum Improvement Proposal 1559 (EIP-1559) in August 2021, a remarkable 3.36 million ETH, worth approximately $9.76 billion, has been burned.
Ethereum-based NFT marketplaces experienced a significant setback in May, with a 48.7% drop in monthly volume, totaling $652 million. Surprisingly, a relatively new player named Blur managed to surpass OpenSea in market share for the fourth consecutive month. The shift in dominance can be primarily attributed to the BLUR token incentives offered by the platform.
Moving on to centralized exchanges (CEX), legitimate spot volume faced a 23.2% decline, reaching its lowest level since November 2020. Key players in this space include Binance with a dominant market share of 71%, followed by Brian Armstrong’s Coinbase at 8.7%, BTSE at 5.1% and Kraken at 4.5%.
Grayscale Bitcoin Trust (GBTC), experienced a significant drop in daily average volume, falling 38.2% to $26 million, marking its lowest level since December 2019.
Open interest in BTC futures is falling
In terms of futures trading, open interest in bitcoin futures witnessed a slight increase of 2.9%, while Ethereum futures saw a more significant increase of 5.7%. However, monthly futures volume for BTC fell by 15.3% to $778.5 billion.
In the regulated futures market, the Chicago Mercantile Exchange (CME) reported an 8.4% drop in open interest for bitcoin futures, amounting to $1.85 billion. In addition, daily average volume experienced a 30.1% drop to $1.22 billion.
For ETH futures, monthly volume fell 24.3% to $408 billion, indicating a slowdown in trading activity for ethereum futures contracts.
In the options market, open interest in BTC options saw a decrease of 10.6%, while ETH options saw a modest increase of 5.6%. However, trading volumes for both BTC and ETH options decreased. Specifically, BTC’s monthly option volume fell 12% to $16.8 billion, while ETH option volume fell 8.5% to $10.7 billion.
The data provides valuable insight into the performance of the crypto market over the past month, revealing a market undergoing a corrective phase, characterized by fluctuations and adjustments across various metrics.
A notable trend is the decline in chain volume, with BTC experiencing a significant decline of 13.3%. This suggests a decrease in transaction activity on the bitcoin network during the period. Conversely, ETH managed a small increase of 3.2%, indicating a relatively more robust performance in terms of on-chain transactions.
Stablecoins, which play a crucial role in the crypto ecosystem, also witnessed a drop in volume on the chain. The total supply of stablecoins decreased by 1.4%, indicating a reduction in circulation in the market.