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Crypto annual report: CEX still occupies more than 90% market share; DeFi tokens plunged 72.9 per cent;

2023-01-24 21:00

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Title: Coingecko Crypto Market Annual Report 2022

Original source: TI Research

With the world in such a difficult situation, it is imperative that the Crypto industry rediscover its core values after suffering a major setback in 2022. Crucially, trust and credibility need to be re-established; At the same time, efforts need to be redoubled to increase the user relevance and usability of Crypto. 2022 May well be remembered as a year to forget, but it should also mark an important turning point for the industry. While 2023 May be too early for a full recovery, we believe that the long winter will eventually usher in a decentralized spring. Let's stick with and Buidl Crypto for the future.

It turns out that 2022 has been a turbulent year for the project side and users of Crypto industry. The winter of Crypto has come. As of January 1, 2023, the total market value of Crypto was $829 billion, down 64% from a year ago. While DeFi token prices and demand for NFT remain subdued, developers continue to develop innovative protocols that have spawned new trends and narratives over the past year.

Our 2022 Crypto Industry Report covers everything from an overview of the Crypto market to analysis of bitcoin and Ethereum, an in-depth look at decentralized finance (DeFi) and non-homogeneous token (NFT) ecosystems, and a detailed look at the annual performance of decentralized exchanges (CEX) and decentralized exchanges (DEX).

The following is a priority summary of the main highlights of this report, welcomeClick DownloadA more complete look at 49 reports.

8 highlights from CoinGecko's annual Crypto 2022 industry report

Here's a summary of the key points of the Crypto industry in 2022:

1. The Crypto market has been moving sideways after Q2 2022, in the low range of $1 trillion and below.

2. Stablecoin lost $27.3 billion in market value despite its increased dominance; At the same time, USDC and BUSD have seen their market values rise.

3. The FTX contagion has affected approximately over 1 million users, creditors and investors, with more to come.

4. With the exception of crude oil and the dollar, mainstream assets have underperformed across the board. BTC was the worst performing asset, falling 64.2%.

5. Driven by Ethereum upgrade Merge, ETH pledges grew steadily to 15.8 million by the end of 2022.

6. Market cap of DeFi tokens (excluding Stablecoins and wrapped tokens) plunged 72.9%, and derivatives market share outstripped income aggregators.

7. In the first winter of the NFT market, OpenSea's market share slipped to 65.4%, but it is still dominant

8. Spot trading volume shrank 67.3 percent from January 2022, with the biggest drop of 21.2 percent in the fourth quarter.

After a brutal second quarter, the Crypto market traded sideways in the low range of $1 trillion or less

Crypto

Amid challenging macroeconomic conditions, and a series of bankruptcies and crashes in the Crypto industry, the end of 2022. The Crypto market is worth $829 billion, down 64% from the start of the year.

The second quarter was the cruelest, with a huge drop. The market then moved sideways until the FTX collapsed in November 2022.

Average trading volume in the fourth quarter was $59 billion, down 32.8% from the previous quarter. Overall, trading volumes have declined steadily over the past year to an average of $86 billion.

Movements in the Crypto market are closely linked to movements in the US stock market, particularly the S&P 500 index through the first three quarters of 2022. In the fourth quarter, however, the correlation turned negative, with the Crypto falling due to FTX, while stocks staged a recovery towards the end of the year.

Stablecoin gained all its market share, but lost $27.3 billion in market value; Meanwhile, the market values of $USDC and $BUSD have increased

Crypto

Last year, Crypto investors moved to safer assets, the top three stablecoins. Tether (USDT), USD Coin (USDC), Binance USD (BUSD) continues to increase its dominance in the Crypto market. However, the stablecoin market was not immune to outflows, with losses totaling $27.3 billion (16.6 percent) by the end of the year. Most of those losses came in May 2022. TerraUSD (UST) during the crash. The sector has held up relatively well since then, despite periodic "black rumors" caused by another anchor break.

The market value of the largest stablecoin, $USDT, fell 16 percent to about $12 billion. In contrast, $USDC and $BUSD each saw modest increases of about $2 billion.

The decentralized head stablecoin $DAI (-43%) and $FRAX (-44%) lost a similar proportion, although in absolute terms $DAI's $4 billion loss was almost five times that of $FRAX.

Outside the top 5, $USDN Dropped out of the top 15 after dropping anchor in November, and was replaced by $MIMATIC It took its place. $USDD Launched in May, it is now No. 8 and its market value has hovered around $700 billion since June.

More than a million customers, creditors and investors were damaged by the FTX debacle; There was a domino effect in the months that followed

Crypto

CoinDesk posted that most of Alameda's assets were issued by FTX. $FTT. Immediately, CZ announced that it was ready to sell. Binance $FTT in pledge. That triggered a run on the bank and led FTX to stop making withdrawals and file for Chapter 11 bankruptcy. It later emerged that Alameda had become insolvent after Terra's collapse, and that FTX user funds had been diverted to prop up the failed trading house.

For example, some of the institutions that have been hit hard include:

BlockFi: a lender that lent $355 million to FTX and $671 million to Alameda.

Genesis Global Trading: $175 million in zombie deposits on FTX. It is currently unable to provide redemption services for its loan products.

Silvergate Bank: Users withdrew $8 billion after FTX collapsed. The bank then cut 40% of its workforce.

While many companies have collapsed in an instant, 2023 is likely to see many more do the same.

With the exception of crude oil and the dollar, major assets underperformed across the board; $BTC was the worst performing asset, falling 64.2 percent

Crypto

Most assets, such as gold and Treasuries, will end up losing money in 2022. Bitcoin was the worst performing of these assets, ending the year with a -64.2% loss.

With the Fed raising rates across the board in 2022, the dollar index (DXY) is outperforming all assets. However, most of those gains were lost in the fourth quarter as interest rate rises slowed; DXY is down -7.4% quarter-on-quarter and has returned just 8.0% year-to-date.

Crude oil saw a sharp rise at the start of the year as demand increased due to the lifting of Covid-19 lockdown, coinciding with massive supply shortages caused by the war in Ukraine. However, it has given back most of those gains, ending the year up just 6.4%.

Driven by upgrades, Ethereum pledges steadily grew to 15.8 million in 2022

Crypto

Despite the sluggish Crypto market, Ethereum (ETH) total pledges showed steady quarterly growth, growing 25% in Q1 2022, 17.8% in Q2, 8.2% in Q3, and 12.5% in Q4. Total pledges rose from 8.8 million to 15.8 million by the end of the year.

The rise in verifiers pledging ETH in the first half of 2022 is likely due to bullish sentiment on Ethereum mergers. After a successful merger in mid-September, the Crypto community began to look forward to the upcoming Shanghai upgrade, as the previous merger upgrade drove significant growth last quarter.

Lido (LDO) continued to take the lead in terms of pledges, accounting for 29% of the total. Its closest competitor, Coinbase, has 12.8 percent of the market.

The Ethereum Shanghai upgrade is expected to take place in March, when pledged users will be able to withdraw their pledged $ETH. Once the upgrade is complete, we may see a reordered pledge leaderboard.

DeFi Tokens plunged 72.9 percent in value, and derivatives outperformed income aggregators in market share

Crypto

DeFi tokens have lost about 73 percent of their market value compared to 2021, and more than $48 billion has been wiped off the market value of various governance and utility tokens. The liquidity pledge sector saw the smallest decline at 25.9%, most likely due to the Ethereum merger event in the third quarter.

The DeFi deal has been hit harder than other circuits, which can be blamed on earlier inflated valuations as well as the withdrawal of capital. Loan and income aggregators were the worst performers in 2022, falling 80.5 percent and 85.3 percent, respectively. Many protocols such as Convex Finance And Alchemix The price of native tokens has fallen by more than 95%.

Despite a 65.0 per cent year-over-year decline, derivatives held market share at 7.9 per cent, putting it ahead of yield aggregators - thanks. Decentralised trading platforms for perpetual contracts such as GMX and Gains Network (GNS) have seen a surge in popularity.

In the first winter of the NFT market, OpenSea's market share slipped to 65.4%, but it is still dominant

Crypto

The NFT market is in its first bear market cycle - NFT trading volume on the Top 8 chains plunged from $13.3 billion in Q1 to $1.5 billion in Q4 2022, a 93.1 percent decline. Meanwhile, NFT creators have also seen their royalties cut by 95% since the beginning of the year.

In the middle of the NFT winter, OpenSea (which includes Ethereum, Polygon, and Solana) remained dominant, accounting for 65.4% of NFT market volume, excluding brush volume. While their market share has shrunk 24.3 percentage points since January 2022, the rise of Solana NFT has boosted Magic Eden's deal share, which rose to 12.5% at the end of 2022.

Although there are many new competitors in the NFT market, such as LooksRare (LOOKS) X2Y2 (X2Y2), OpenSea defends its dominance. These competitors incentivize users to trade on their platforms by giving them incentives. But users often earn these rewards by brushing. In January 2022, 98.5 per cent of NFT transactions on LooksRare were brushes. Since then, the trade volume has decreased to 75.5 percent in December 2022 due to the reduction of incentive emissions.

Spot trading volume has shrunk 67.3 percent since January 2022, with the fourth quarter of 2022 seeing the largest sequential decline of 21.2 percent

Crypto

In January, the Crypto exchange's Top10 spot trading volume totaled $1.5 trillion. But after the FTX collapse, spot trading volumes fell 67.3 per cent in December to $0.46tn, the lowest level of the year. The biggest decline (quarter-on-quarter) occurred in the final quarter, with total spot trade volume falling 21.2 percent from $2.9 trillion in the third quarter to $2.3 trillion in the fourth quarter of 2022.

Despite public demonstrations of the risks of decentralization, the ratio of CEX: DEX continues to rise. While DEX's market share rose slightly in November, helped by concerns that Binance might go bankrupt, CEX still held 92.5 percent of the market at the end of 2022.

Weak trading volumes are a sign that investors are pulling their money out of the market, or that they are using the closure of a CEX to exit the market altogether.