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Binance Research’s H1 2023 Report: A Positive Note in Challenging Times for Crypto

Binance’s extensive “Half-Year Report 2023 July 2023,” published on July 20, offers a glimpse into the current condition of the crypto market, nearly two years after its apex in late 2021.

Despite encountering obstacles in the first half of the year, the crypto sector has shown durability, manifesting positive growth in market capitalization on a quarterly, semi-annual, and yearly basis.

In the first half of 2023, the cryptocurrency market experienced a wave of heightened institutional interest and adoption, though it also contended with increasing regulatory scrutiny.

Despite these uncertainties, total market capitalization witnessed a significant 47.0% growth in Q1. Conversely, the global stablecoin market capitalization saw a 7.0% decrease, while USDT’s market share notably rose by 25.8%.

Furthermore, the report signifies a dip in overall crypto transaction activities, especially venture capital funding, during H1 2023. Nonetheless, the infrastructure sector emerged as a pivotal investment target. The gaming/entertainment and DeFi (Decentralized Finance) sectors also attracted significant investments.

Bitcoin’s Unwavering Dominance: Market Share Soars Amid Regulatory Pressures

Bitcoin, the world’s leading cryptocurrency, maintains its dominance in the market and strengthens its status as a favored investment choice.

Bitcoin’s market dominance hit its peak level since April 2021, exhibiting a year-to-date price performance surpassing 87%, thereby outperforming numerous conventional financial investments.

Despite the regulatory pressures that have impacted other crypto investments, Bitcoin has demonstrated its resilience, achieving a market dominance increase from 40.4% to 50.5% in the first half of the year, thereby accounting for more than half of the total cryptocurrency market capitalization.

Financial indicators present an optimistic outlook for Bitcoin, as its market cap has grown by 87.7% in the past six months, nearly doubling the total growth of the cryptocurrency market cap, which expanded by 47.6%. Bitcoin’s trading volume also experienced a substantial increase, with an impressive surge of 185.4%.

Bitcoin’s network metrics suggest a significant influence from developments such as Ordinals, Inscriptions, and BRC-20 tokens. The number of transactions, as measured by a 7-day moving average, saw a rise of over 58%, while the number of active addresses went up by 10.7%.

The report also emphasized a 40% increase in the hashrate used to secure the Bitcoin blockchain since January 2023 and a 43% growth in mining difficulty during the same timeframe.

These increases can be attributed to more miners joining the network and existing miners augmenting their computing power for their operations.

Advancements in Layer One and Layer Two Solutions in 2023, DeFi and NFTs

During this timeframe, various Layer One solutions have achieved substantial progress. Ethereum’s liquid staking saw significant growth, paving the way for Liquid Staking DeFi, with Solana standing out as the top performer since the start of the year.

BNB Chain’s network performance was particularly notable, showcasing a remarkable 113% increase in daily transactions, outstripping Ethereum’s 48% during the same period.

On the Layer-2 (L2) side, 2023 saw considerable progress, with Ethereum’s L2 scaling solutions witnessing high-quality projects operating effectively beneath the foundational L1 chain.

While optimistic rollups continue to hold a dominant position, zero-knowledge (ZK) competitors are swiftly gaining ground in the market.

Significant advancements were made in DeFi, spurred by liquid staking and the increasing shift of users to decentralized exchanges (DEXes). Nonetheless, DeFi’s dominance saw a slight decrease of 0.5% relative to the overall crypto market.

In the NFT domain, trading volume saw an uptick in H1 2023 compared to H2 2022, primarily due to early-year activity on the Blur marketplace. NFTs reported sales volume amounting to US$5.3 billion, which reflects a considerable drop of 75.9% compared to the same period the previous year. Overall, NFTs underperformed compared to the broader crypto market.

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What we write about

I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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