The Binance report revealed that on-chain metrics indicated a notable resurgence in gaming activity in 2023.
Binance, the world's largest cryptocurrency exchange by trading volume, has released its annual report on the digital asset industry for 2023 and a possible outlook for the new year.
In a blog post published On January 15, 2024, the company revealed that the industry witnessed a significant recovery with a 109% increase in total market capitalization after a year of turbulence in 2022.
Market resilience amid turbulence
The report, authored by Binance's research team JieXuan Chua, CFA, Moulik Nagesh, Shivam Sharma and Brian Chen, revealed that the market rally was driven by substantial gains in the first (Q1) and fourth quarter (Q4) of 2023.
Binance attributed the market performance in the fourth quarter to increased optimism driven by the early launch of bitcoin spot exchange-traded funds, which was finally approved on January 10, 2024 by the US Securities and Exchange Commission. US (SEC).
The report also cited optimism around bitcoin's upcoming halving in April as one of the critical factors that significantly contributed to the 109% increase in market capitalization in 2023.
Additionally, Binance said that the broader financial market, marked by resilient global GDP growth and moderate inflation rates, greatly impacted the growth of the market for risky assets such as cryptocurrencies.
Market Analysis: DeFi vs nft
In terms of segments, the decentralized finance (DeFi) sector saw a strong growth of 38.9% year-on-year (“YoY”) compared to non-fungible tokens (nft). The rise of Liquid Staking Tokens (“LST”) and LSTf are major contributors to the positive performance of DeFi in 2023.
Furthermore, the emergence of intent-centric architecture and the growing adoption of real-world assets also did an excellent job in driving the growth of the DeFi sector.
In the case of NFTs, the sector began to recover towards the end of the year. According to the report, the nft market saw a rebound in the fourth quarter of 2023 after lower interest in digital artworks and other collectibles following the nft boom in 2021.
The market recorded $1.7 billion in trading volume in December, with bitcoin NFTs showing the most impressive growth.
The Binance report says that the current competition between nft marketplaces emerged as a major theme for the sector's growth last year. The studio also cited the imminent launch of the Blur-aligned Layer 2 platform, Blast, as a development worth noting.
As for SocialFi, the introduction of friend.tech in August 2023 propelled the sector into the spotlight, showcasing the market's potential and its appeal to creators looking to monetize content.
Despite initial success, activity on SocialFi platforms has declined. However, Binance believes that the coming months will reveal whether there is a potential resurgence of interest or whether new trends will dominate the evolving landscape.
Eight key growth themes for 2024
The Binance report revealed that on-chain metrics indicated a notable resurgence in gaming activity in 2023. The final week of the year saw a surge, with 12.6 million weekly unique active wallets, more than double the number at the beginning. of the year, which stood at 5.8 million.
With the imminent release of multiple games from renowned gaming giants, 2024 will be an exciting year for gamers around the world.
By 2024, Binance believes that the cryptocurrency market will experience significant growth driven by eight key themes, such as the bitcoin ecosystem, property economy applications, artificial intelligence (ai), real-world assets (RWA) , on-chain liquidity and institutional adoption.
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