A Year in Data: 5 Charts Showing How Cryptocurrencies Will Change in 2023

After a turbulent 2022 for the cryptocurrency industry, 2023 has provided much-needed relief to participants.

From GBTC’s shrinking discounts to Binance’s market share decline, USDC pressure, the rise of Bitcoin NFTs, and the cryptocurrency market recovery, here are five charts that show how the industry has changed over the past year.

GBTC’s discount to NAV narrows

Grayscale Bitcoin Trust (GBTC) discount fell to its lowest level in more than two years after Grayscale Investments won against the Securities and Exchange Commission in August in the process of converting its flagship GBTC product to a spot Bitcoin ETF. I lost.

GBTC’s discount to net asset value (NAV) (meaning how much the market price of each stock is below the value of its corresponding Bitcoin) is trading below 10% for the first time since July 2021.

GBTC is currently trading at a discount because the shares cannot be redeemed, so the only option is to sell the shares to other potential buyers. However, historically they have traded at a premium until the 2021 cryptocurrency credit crunch.

The trend, which saw discounts of more than 40% before BlackRock and others filed applications for spot Bitcoin ETFs in June, has fueled optimism that the SEC will approve spot Bitcoin ETFs in the U.S., including a potential conversion of GBTC. It is likely a sign that it has risen.

According to TradingView, GBTC is up more than 320% in one year compared to Bitcoin’s 160%.

Binance’s market share declines

Binance has had a disastrous 2023 on the legal and regulatory front.

Last November, U.S. authorities including the Justice Department, Treasury Department, and Commodity Futures Trading Commission reached a settlement with Binance, concluding a criminal investigation into alleged money laundering and sanctions violations. It was one of the largest corporate settlements in U.S. history. The settlement included a $4.3 billion fine and criminal charges against former CEO Changpeng Zhao. Zhao agreed to step down as CEO as part of a plea deal with the DOJ. Zhao pleaded guilty to violating the Bank Secrecy Act and will pay a $50 million fine ahead of his sentencing hearing in February.

In the U.S., the SEC also filed a lawsuit against Binance in June, alleging it violated U.S. securities laws, and argued that the regulator should ban the company and Zhao from further doing business in the United States. by the Commodity Futures Trading Commission last March.

In Europe, Binance announced that it was leaving the Netherlands after failing to obtain regulatory approval. It has also been reported that the Cyprus local corporation has applied for registration cancellation and is being investigated in France on suspicion of money laundering.

Binance.US has reduced its headcount due to the SEC’s lawsuit against the company. Additionally, business declined as the company’s customers could no longer use U.S. dollars to purchase cryptocurrencies on the platform. In September, the company laid off a third of its remaining employees, and Binance.US President and CEO Brian Shroder also left the company due to uncertainty and declining business.

Binance itself laid off at least 1,500 employees last year, including global head of product Mayur Kamat, Asia-Pacific head Leon Foong, chief strategy officer Patrick Hillman; The departures of high-profile executives, including general counsel Hon Ng and chief business officer, reportedly made headlines. Ivo ring.

As a result, Binance’s market share on non-USD exchanges declined from over 70% at the start of 2023 to around 46% by the end, according to The Block’s data dashboard.

USDC is under pressure.

USDC issued by Circle has captured a 32% share of the stablecoin market since 2023, according to data from The Block. This amounts to $48.1 billion out of the total supply of $153.1 billion as of January 1, with USDT issued by Tether accounting for 50% ($75.7 billion) and the decentralized DAI stablecoin accounting for 4% ($5.8 billion), the third largest supply. This is the amount.

By March, USDC had fallen to $0.88 after Circle revealed that it had $3.3 billion in reserves at the failed Silicon Valley Bank. The disclosure sparked significant selling, with investors turning to other stablecoins like Tether’s USDT or leaving the cryptocurrency market altogether, causing USDC’s market cap to fall 15% in just 24 hours. The situation was further complicated by major exchanges such as Coinbase and Binance suspending USDC conversion amid the chaos.

Since then, USDC’s market share has continued to come under pressure, falling to $26.2 billion (19%) of the current total stablecoin supply of $138.8 billion last year as holders reallocated to other crypto assets or exited to fiat. .

USDT strengthened its dominance in terms of percentage and value, accounting for 71% of the market with a supply of $98.6 billion. While DAI is relatively flat, newcomer First Digital USD (FDUSD) has captured $1.8 billion, or 1.3% of the market, since inception. Binance encouraged users to switch to FDUSD in August amid support for Binance USD (BUSD) being phased out after issuer Paxos stopped issuing new BUSD tokens in early 2023.

Bitcoin helps the slumping NFT sector make a comeback.

Bitcoin was not previously known as an NFT, and users preferred blockchains better suited to trading and issuing assets, such as Ethereum and Solana. That was until Ordinals exploded onto the scene last year, making it easier and cheaper to post fully on-chain NFTs to the blockchain.

The Bitcoin Ordinals protocol, launched in January 2023 by Casey Rodarmor, provides a new way to store and transact digital content in Bitcoin. Utilizing Satoshi, the smallest unit of Bitcoin, users can inscribe NFTs, BRC-20 tokens, and other random data directly onto the blockchain, with each piece becoming a unique, tradable asset.

Although the terms “ordinal” and “inscription” are often used interchangeably, an ordinal is technically a unique serial identifier for a single satoshi, while an inscription is the content or data attached to that specific satoshi.

Inscription has spread to other chains in recent weeks, including Ethereum, Solana, Near, Polygon, Celo, and Fantom, resulting in a surge in transactions amid ongoing controversy over its use. While some see this as “spam” that needs to be eradicated, others see inscriptions as a legitimate use case that could benefit Bitcoin’s long-term security by increasing transaction fee shares for miners compared to reducing block rewards. see.

Transactions on the Bitcoin network have surged at several points over the past year, coinciding with an increase in inscription-related activity, hitting an all-time high of 633,000 average daily transactions in December, with NFT trading volumes reflecting the impact.

NFT trading volume has been declining since February, and the overall rebound has coincided with increased Bitcoin activity. A recent surge in inscription demand pushed the metric to a yearly high in mid-December, with Bitcoin-based NFTs accounting for approximately 59% of the weekly peak NFT volume of $518 million.

Cryptocurrency market is rebounding

After the trials and tribulations of a tumultuous 2022 for the cryptocurrency market, 2023 ended in a much better place. Bitcoin is up about 160% since it started 2023 at $16,600, according to price data from The Block. Ethereum has lagged behind the leading cryptocurrency by market capitalization since March, but is still up about 94% from $1,200 a year ago.

The DeFi sector is off to a good start in 2023, but both Bitcoin and Ethereum have underperformed since the spring. But it still ended the year up about 67%.

Solana has had the biggest win among the top 10 cryptocurrencies by market capitalization, up nearly 1,000% from less than $10 on January 1, 2023.

With anticipation of the possible approval of a spot Bitcoin ETF and the upcoming Bitcoin halving event, there will certainly be more to talk about in 2024.

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