Crypto market analysis platform CoinGecko has provided a breakdown of the industry’s growth in 2023 amid optimism and anticipation about several events this year, including the recent approval of spot Bitcoin exchange-traded funds (ETFs) and the upcoming Bitcoin halving.
According to the report, the market witnessed substantial growth in several areas, including decentralized finance (DeFi), non-fungible tokens (NFTs), centralized exchanges (CEXs), and decentralized exchanges (DEXs).
Crypto Market Cap Increased 2.6x
During 2023, the crypto ecosystem more than doubled its total market cap, rising 108% from $832 billion recorded at the beginning of the year. Most of the growth occurred in Q4 when optimism surrounding the potential approval of the spot Bitcoin ETFs ramped up, leading to a 55% rise in the market cap from $1.1 trillion to over $1.7 trillion.
CoinGecko attributed the market cap rise to Bitcoin’s (BTC) impressive resurgence, as the asset soared from $27,000 to $42,000 in Q4 and recorded a 155% growth throughout the year.
“BTC had a strong first leg up in Q1, rising +72.4%, followed by another spike in Q2. It then pulled back in Q3, dropping -11.5%, before rallying in Q4. Similarly, the average trading volume of BTC dropped off around the end of Q1 and gradually declined in Q2 and Q3. It then picked up in Q4 to $18.0 billion, a gain of +64.3% QoQ,” analysts said.
Other crypto assets like Ether (ETH) and Solana (SOL) also recorded impressive gains last year. The former rose 90.5%, closing the year at $2,294, while the former surged over 900% and ended the year at $103.
CEXs Dominated Crypto Trading Volume
Furthermore, the crypto market saw $36.6 trillion in trading volume in 2023, with the most impressive growth experienced in Q4, a gain of 53.1% from $6.7 trillion in Q3 to $10.3 trillion. Q4 2023 marked the first quarter-on-quarter growth of the year, stemming from excitement around ETFs.
CEXs dominated the trading volume despite the regulatory hurdles of the largest crypto exchange, Binance, and the implosion of FTX the year before.
Meanwhile, NFT trading volume declined, ending the year at less than half of the figure from 2022. The volumes of the top 10 chains amounted to $11.8 billion, while that of the previous year stood at $26.3 billion.
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