[NEWS] Binance releases report showing 8.6% decline in cryptocurrency market capitalization from last quarter

It turns out that the third quarter of 2023 has been a difficult time for the cryptocurrency sector. On the 19th, Binance Research, the research division of major cryptocurrency exchange Binance, published a report summarizing the results of its analysis titled "The Current State of Cryptocurrency in Q3: Market Pulse."

According to the report, the market capitalization of cryptocurrency fell 8.6% compared to the previous quarter. During this period, the cryptocurrency industry received good news, such as Ripple and Grayscale essentially winning their lawsuit against the SEC (US Securities and Exchange Commission), but it has become clear that the market's vitality has not yet returned.

The published report is a compilation of key charts and insights by Binance Research, focusing on the current state of cryptocurrency. However, the report warns that the cryptocurrency industry is constantly changing from quarter to quarter, and that analyzing only a specific period will reveal short-term trends but not the overall trend. It is said that we are currently in a state of "uncertainty."

Although the market capitalization has decreased, the report states that even amid the price decline, there has been a surge in major companies entering the Web 3.0 space, including the cryptocurrency NEAR, which recorded a 120% growth in average monthly transactions from the previous quarter, expectations that a Bitcoin spot ETF is imminent, positive reports on regulations, and major companies such as Deutsche Bank, Sony, and PayPal announcing their entry into the Web 3.0 space.

One of the highlights is investment in Web 3.0 projects. According to the report, there have been cases of large investments, such as Flashbots' $60 million Series B funding and Core Scientific's $54 million strategic investment.

He added that "gaming and the metaverse are also attracting strong interest, with Futureverse raising $54 million to develop an AI-centric consumer game," and that Animoca Brands has raised $20 million for its Mocaverse project. Venture capital investment in the Web 3.0 space appears to be active.

The report cites Ethereum (ETH) staking as a sector that has performed well this quarter. The report states that 20% of ETH is currently staked, and most of the increase is due to Lido Finance.

Lido Finance is a DeFi liquidity protocol released in 2020. It provides a service called liquid staking, and when ETH is deposited, Lido Staked ETH (stETH) is issued at a 1:1 ratio. The system allows users to earn staking rewards from Lido while depositing stETH into another DEX such as Curve Finance to improve operational efficiency.

The report also stated that hacking incidents have increased across the industry, with the highest number of incidents in the third quarter. It also reported that NFTs have seen a decline in trading volume. It explained that BNB Chain is currently the most used blockchain game, followed by Ethereum and Polygon.

However, it points out that GameFi's potential has not yet been fully realized. Currently, only 28% of blockchain games are in operation, and most projects are in the alpha or beta stages. Therefore, if the operation rate of blockchain projects increases, the market size of the cryptocurrency area may expand. In particular, it points out that Move to Earn is attracting attention as a category.

Furthermore, it was mentioned that of the top five game-related stocks by market capitalization, The Sandbox (SAND), Decentraland (MANA), and Apecoin (APE) are related to the metaverse. For this reason, it was pointed out that metaverse-related games may also attract attention in the future.

Reference:Report
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