In the third quarter of 2023, the crypto market experienced a significant decrease in its overall market capitalization, according to CoinGecko’s 2023 Q3 Crypto Industry Report. The market capitalization dropped by 10%, totaling a loss of $119 billion from the previous quarter. This decline was primarily driven by a sudden market downturn in mid-August, which split the Q3 into two distinct parts.
Q3 Crypto Trends: Liquidity & Trading Volume Decline
The third quarter was a tale of two halves, with a sudden and unexpected market drop occurring in mid-August. This drop caused Bitcoin’s (BTC) value to plummet from approximately $29,000 to just $26,000 within a single day, shrinking the total cryptocurrency market capitalization from $1.2 trillion to $1.1 trillion.
This significant decline perplexed many in the crypto space, as there were no major market-related news events on that fateful day. Traders were gradually winding down their activities as summer came to a close. Centralized exchanges experienced a 20.2% decrease in trading volumes during the third quarter, reflecting the lack of momentum in the crypto market.
CoinGecko’s comprehensive 2023 Q3 Crypto Industry Report covers various aspects of the cryptocurrency landscape, including an analysis of Bitcoin and Ethereum, a deep dive into decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, and a review of the performance of centralized exchanges (CEX) and decentralized exchanges (DEX).
During this quarter, the crypto market witnessed notable shifts in rankings. Solana (SOL) and TrueUSD (TUSD) climbed the ranks, while Litecoin (LTC), Avalanche (AVAX), and Binance USD (BUSD) faced declines. Hedera (HBAR) and Filecoin (FIL) secured positions in the top 30, but Lido (LDO) and Internet Computer (ICP) fell out of the rankings.
The stablecoin market also experienced a 3.8% contraction in its market cap. TrueUSD (TUSD) was the only gainer among the top 5 stablecoins, while others, such as USD Coin (USDC) and Binance USD (BUSD), suffered losses.
The report highlighted the growing interest in Real World Asset (RWA) tokenization, particularly in tokenized US treasury bills, which saw a 5.84x increase in market cap from January to September. Traditional financial institutions led the charge, with Franklin Templeton and Ondo Finance holding significant market shares.
NFT trading volume declined by 55.6%, falling from $3.67 billion in Q2 to $1.63 billion in Q3. Ethereum maintained its dominance in the NFT market, while ImmutableX NFTs gained ground with the launch of Gods Unchained.
Lastly, spot trading volume on centralized exchanges dropped by 20.1%, with Binance’s market share hitting a yearly low of 44%. HTX, formerly known as Huobi, regained its position in the top 10, while Kucoin was edged out.
On the decentralized exchange front, spot trading volume declined by 31.2%, with Sushi losing its top 10 spot, which Orca took. THORchain saw the most significant gains, although this surge in volume was partly attributed to illicit transfers.
Related Reading | SEC Drops Case Against Ripple Execs As Judge Signs Dismissal Order