A new year brings new beginnings, as the crypto market woke from its end-2022 hibernation to shake off the bears, increasing 48.9% from a total market cap of $831.8B on Jan 1, 2023 to $1.238T on Mar 31, 2023. While it was not smooth sailing all the way, this run reversed losses stemming from FTX’s collapse, returning the market to heights before the Ethereum Merge. Prices of Bitcoin (BTC) and Ethereum (ETH) are now hovering around $28,000 and $1,800 respectively, with BTC performing particularly well, gaining close to 72% this quarter.

Our comprehensive 2023 Q1 Crypto Industry Report covers everything from the crypto market landscape to analyzing Bitcoin and Ethereum, deep diving into the decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, and reviewing how centralized exchanges (CEX) and decentralized exchanges (DEX) have performed.

We’ve summarized the key highlights, but be sure to dig into the full 44 slides below.

1. The crypto market is off to a strong start, rallying 48.9% to $1.2 trillion

The crypto market is off to a strong start in 2023, having ended Q1 with a total crypto market cap of $1.2 trillion. Compared to its performance in 2022 where it rounded the year at $829 billion, this reflects a gain of 48.9% or $406 billion in absolute terms.

Meanwhile, average daily trading volume also picked up, having increased 30% QoQ from -33% in 2022 Q4 to a total of $77 billion in 2023 Q1. Trading volume saw an upswing in January 2023, when the market started rallying. It then spiked momentarily in early March due to increased volatility from the banking crisis, before tapering off in late March, when Binance removed part of their zero-fee trading incentives for BTC.

2. Bitcoin outperformed traditional asset classes, posting a 72.4% gain

Bitcoin was the best-performing asset in 2023 Q1, marking gains of 72.4% QoQ, followed by NASDAQ index (15.7%) and gold (8.4%).

All major asset classes ended the quarter in the green, except for crude oil that fell -6.1%. This outcome was unsurprising as crude oil was one of only two assets that ended 2022 on the upside. Crude oil initially dipped to as low as -17.2% due to a US inflation report citing a reduction in oil demand, on top of the US banking crisis—but managed to pare these losses towards the end of March.

The US Dollar Index (DXY), along with other fiat currencies, remained relatively flat throughout the same period, the result of cooler-than-expected inflation data.

3. Stablecoins shed $6.2 billion or 4.5%, with USDC and BUSD being the biggest losers

The top 15 stablecoins saw its market cap fall by 4.5% ($6.2 billion) due to the shutdown of Binance USD (BUSD) by Paxos and the brief USD Coin (USDC) depegging event during SVB’s collapse.

Already the largest stablecoin, Tether (USDT) further strengthened its foothold, adding 20.5% ($13.6 billion) to its market cap. USDC and BUSD saw losses of 26.9% and 54.5%, respectively, erasing 2022 gains.

Meanwhile, True USD (TUSD) entered the top 5 stablecoins, overtaking FRAX. Binance minted $130 million TUSD, while Tron minted a further $750 million, propelling its market cap to grow by 169.3%. In terms of stablecoins outside the top 5, GUSD and USDP fell 32.0% and 12.3% respectively.

4. DeFi ecosystem rose 65.2% by $29.6 billion, buoyed by the liquid staking sector rising 210.9%

The Decentralized Finance (DeFi) sector market cap jumped 65.2% in 2023 Q1, translating to $29.6 billion in gains, mainly driven by liquid staking governance token performance.

With the confirmation of Ethereum’s Shapella upgrade, liquid staking governance tokens saw a 210.9% increase in market cap in Q1. It has now surpassed lending protocols to become the 3rd largest category in DeFi.

Despite growing 44.3% in market cap in the first quarter of 2023, decentralized exchange (DEX) governance tokens continued to lose market share, and has dropped by -5% since January.

5. NFT trading volume saw a resurgence to $4.5B, with Blur flipping OpenSea as the top NFT marketplace

NFT trading volume picked up significantly, rising 68% from $2.1 billion in 2022 Q4, to $4.5 billion in 2023 Q1.

The majority of NFT trading volume came from Blur, a new NFT platform launched in October 2022. Within six months, it has dethroned former market leader OpenSea, growing its market share from 52.8% in December 2022 to 71.8% in March 2023, and currently dominates the top 6 NFT marketplaces. Meanwhile, OpenSea’s market share shrunk from 29.3% to 21.7% over the same period.

While most chains saw an increase in trading volume in Q1, Solana’s ecosystem waned. Magic Eden, the largest marketplace on the network, saw its trading volume drop from $73.9 million in December 2022 to $23.6 million in March 2023, a 67.9% decline. Prominent collections y00ts and DeGods also migrated to other chains, dealing a further blow to Solana.

6. Crypto spot trading volume up 18.1% reaching $2.8T in Q1, with DEXs outpacing CEXs’ quarterly growth

Spot trading volume across the top 10 crypto exchanges totaled $2.8 trillion for 2023 Q1, representing an 18.1% increase from 2022 Q4. Monthly trading volume has been on an upward trend since $0.5 trillion lows in December 2022. However, monthly volumes have yet to hit an average of $1 trillion, a figure last seen in the first half of 2022.

Amid the crackdown on CEXs by regulators worldwide, DEXs saw its growth outpace that of CEXs by nearly two times. DEXs grew 33.4% , versus 16.9% for CEXs in 2023 Q1. Despite this, the ratio of CEX : DEX trading volume remained above 90% throughout the same period.

Read the Report: CoinGecko’s 2023 Q1 Annual Crypto Industry Report

Read more: https://www.coingecko.com/research/publications/2023-q1-crypto-report