Bitcoin and DeFi drive cryptocurrency rebound in 2023
Cryptocurrency market capitalization reached $1.2 trillion at the end of the quarter
The cryptocurrency market has started 2023 with a bang, as CoinGecko’s Q1 2023 Cryptocurrency Industry Report shows. According to this publication, it highlights the increase in the market capitalization of Bitcoin (BTC) and decentralized finance protocols (DeFi).
Decentralized financial system: “DeFi”
In the case of bitcoin, the reigning cryptocurrency became the best-performing asset in the first quarter of 2023, with gains of 72.4%, outperforming other assets such as the NASDAQ index and gold, which posted gains of 15.7% and 8.4%, respectively.
The report notes that all major asset classes except oil posted gains during the first quarter of the year. Crude oil fell 6.1%, which was attributed to U.S. inflation data citing reduced oil demand and the ill effects of the U.S. banking crisis.
Thanks to the rally in bitcoin and other ‘tokens,’ the global cryptocurrency market capitalization reached $1.2 trillion at the end of the first quarter, up $406 billion from the end-2022 market capitalization of $829 billion.
Likewise, the DeFi space was another top performer during the first three months of the year, with a $29.6 billion increase in value. According to this publication, liquid betting governance ‘tokens’ saw a 210% increase in market capitalization since the start of 2023, making it the third largest category in the DeFi sector.
DeFi Ecosystem Overview
DeFi market cap rose 65.2% by $29.6 billion, driven by liquid staking governance tokens
On the flip side of the scale, the top 15 ‘stablecoins’ have seen their market capitalization fall by $6.2 billion. CoinGecko attributes this 4.5% drop in market cap to Paxos’ closure of Binance USD and the momentary depreciation of USD Coin (USDC) during the collapse of Silicon Valley Bank in March 2023.
Meanwhile, Tether (USDT) reinforced its position as the largest stablecoin by market cap in 2023, adding $13.6 billion since the beginning of the year, while USDC and BUSD posted market cap losses of 26.9% and 54.5%, respectively.
Elsewhere, non-fungible token (NFT) trading volume also increased again as 2023 began, marking a 68% increase from Q4 2022 to $4.5 billion during Q1 2023.
