According to the Binance report, the cryptocurrency market saw declines across the board in the third quarter, as fundraising and developer activities plummeted.
Binance has called the third quarter of 2023 “a challenging quarter” for cryptocurrencies. In its “Market Pulse” for the third quarter reportBinance highlighted some drawbacks facing the crypto industry, adding information and shedding light on the overall state of the industry.
The report revealed declines in the industry at various points. For example, Binance notes that the total market capitalization fell 8.6% quarter-on-quarter (QoQ) despite a rebound following Ripple and Grayscale’s court victories. However, Binance stated that institutional adoption increased with Grab, PayPal, Sony and Deutsche Bank.
Binance also reported a decline in quarter-on-quarter developer activity as the weekly active developer count declined. The positive side is that projects like Chainlink are seeing increases. While Chainlink saw a 363% increase in developer activity, Taiko and Zora saw 200% and 100%, respectively.
Binance report notes significant decline in Q3 fundraising
Additionally, the cryptocurrency market saw a decline in fundraising activity. Binance specifies that in the third quarter of 2023, the industry recorded the lowest amount since the fourth quarter of 2020. Specifically, total funds raised fell by 21.4%, while fundraising rounds fell by 24, 9%.
The gaming and metaverse sectors saw some action, with Futurewave receiving $54 million to create consumer games focused on artificial intelligence. Hong Kong-based Animoca Brands also raised $20 million to develop its Mocaverse project. However, infrastructure was the sector that raised the most funds year-to-date (YTD), compared to nft, DeFi, gaming, metaverse, and CeFi.
Additionally, in the third quarter of 2023, Binance reports that the crypto Fear & Greed Index lost 9 points, falling below 50. The index analyzes the cryptocurrency market and generates a number between 0 and 100. A low number indicates that there are fear in the market and that investors are selling. When the number is high, it reflects positive market sentiments and usually means people are buying more.
Overall, activity fell on most blockchains. However, Near was a clear exception in the third quarter, seeing an increase of approximately 120% quarter-over-quarter. Others such as Solana and BNB Chain recorded declines.
In DeFi, total value locked (TVL) fell by 13.1%. Despite losing 18.6%, ethereum maintained its position as the largest blockchain with a TVL of 55.1%. Tron’s QoQ TVL increased by 17.9%.
nft and Blockchain Transaction Fees
Since January 2021, nft sales were the worst in September as interest continued to decline. While average sales for the month fell more than 95%, from $791.84 in August to $38.17 in September, overall sales also declined to $300 million.
For eth, the average transaction fee decreased to $4.8 in the third quarter, returning to the exact average of the first quarter of the year, although it almost doubled to $8.8 in the second quarter. Binance suggests that the drop is due to the increased use of layer 2 networks, which take some pressure off the ethereum blockchain. Additionally, the amount of eth staked increased in the third quarter, with around 22% of all eth in circulation staked in the quarter.
Binance also reported a drop in average BNB Chain transaction fees to $0.09 in the third quarter, the lowest of the year. While the first quarter was $0.19, the average in the second quarter was $0.14.
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Tolu is a Lagos-based cryptocurrency and blockchain enthusiast. He likes to demystify cryptocurrency stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not neck-deep in cryptocurrency stories, Tolu enjoys music, loves to sing, and is an avid movie lover.
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