The cryptocurrency ecosystem has enjoyed a buoyant start to the year as Bitcoin (BTC) and decentralized finance (DeFi) protocols increase in market capitalization during the first quarter of 2023.
Here are the key takeaways from the first quarterly crypto industry report published by CoinGecko on April 18. BTC emerged as the best-performing asset of the first quarter of 2023, with gains of 72.4%, outperforming indices such as the NASDAQ and gold, which marked gains of 15.7% and 8.4%, respectively.
The report highlights that all major asset classes experienced gains during the first quarter of the year, except crude oil, which fell 6.1%. This decline was attributed to US inflation data citing a reduction in demand for oil and the deleterious effects of the US banking crisis.
The broader cryptocurrency markets have enjoyed a quarter of a revival, with overall market capitalization reaching $1.2 trillion at the end of the first quarter. CoinGecko highlights a gain of 48.9%, $406 billion from the cryptocurrency market capitalization of $829 billion at the end of 2022.
The DeFi space had another standout performance, rising $29.6 billion in value during the first quarter. The report cites the impressive performance of liquid staking governance tokens, which saw a 210% increase in market capitalization since early 2023.
Ethereum’s Shapella upgrade played a major role in driving increased capital flows into liquid staking pools, and the network upgrade finally unlocked ETH staking reward withdrawals. The report notes that liquid participation is now the third largest category in the DeFi sector.
Related: Ether Hits 11-Month High As Post-Shapella Withdrawals Surpass 1M ETH
While Bitcoin and DeFi have been the main drivers so far this year, the top 15 stablecoins saw their market capitalization drop by $6.2 billion. CoinGecko attributes this 4.5% drop in market cap to the shutdown of Binance USD by Paxos and the momentary decoupling of USD Coin (USDC) during the Silicon Valley Bank collapse in March 2023.
Tether (USDT) strengthened its position as the largest stablecoin by market cap in 2023, adding $13.6 billion since the start of the year, while USDC and BUSD posted market cap losses of 26.9% and 54.5%. , respectively.
Non-fungible token transaction volume also increased again in 2023, marking a 68% increase from Q4 2022 to $4.5 billion during Q1 2023. NFT market newcomer Blur accounted for the largest share. of NFT transaction volume since its launch in October 2022, representing 71.8% of the NFT market share as of March 2023.
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