Q2 lacked strong market narratives compared to Q1, which saw developments like bitcoin price doubling and the rise of layer-2 protools.
A new report by digital asset price-tracking platform CoinMarketCap revealed that the second quarter (Q2) of 2023 seemed like a lost one in the crypto world because it failed to produce groundbreaking developments.
According to a document seen by CryptoPotato, Q2 lacked strong market narratives compared to Q1, which saw developments like bitcoin price doubling, the rise of layer-2 protocols, and a more active non-fungible token (NFT) market.
A Lost Quarter
Q2, on the other hand, recorded trends like the memecoin season and the rise of BRC-20 tokens, which CoinMarketCap said was noteworthy but failed to generate the level of excitement witnessed in the previous quarter.
The first and second quarters ended with a similar global crypto market capitalization. The end of Q2 saw the total market cap at $1.17 trillion, indicating a 48% year-to-date increase, but most of that was generated in Q1.
The total spot trading volume of the top 20 crypto exchanges plunged by 36%, reaching an almost dormant state by the end of Q2. After peaking in March, the total trade volume declined to c.$523 billion per month.
Spot Trading Volume on Crypto Exchanges. Source: CoinMarketCap Notably, the CoinMarketCap fear and greed index, which began the year at roughly 30, indicating fear, ended the first half at neutral (52), showing a significant improvement in market sentiment.
Significant Developments
While Q2 seemed like a lost quarter, some notable events occurred in the crypto space within the timeframe.
One such event is BlackRock, the world’s largest asset manager, with roughly $9 trillion in assets under management, filing for a spot Bitcoin exchange-traded fund (ETF). The move spurred several traditional finance giants like ARK Invest, Fidelity Digital, Valkyrie, VanEck, and 21Shares to seek approval from the U.S. Securities and Exchange Commission for similar Bitcoin ETFs.
Another notable development was the surge in Liquid Staking Derivatives (LSDs), which CoinMarketCap attributed to the Ethereum Shapella upgrade in April. By the end of June, LSD platforms had secured more than a third of Ethereum’s total value staked.
Other significant events include the emergence of an ecosystem of projects focused on making real-world assets tradeable on-chain, the introduction of Decentralized Physical Infrastructure solutions, the increased use of zero-knowledge Sync solutions, and the inception of platforms that enable the restaking of staked ether.
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