Crypto Market Insights 2023Q1

It's already 1/3 of the way through 2023 and a new summer in the northern hemisphere. But after a stormy first few months, the Crypto industry doesn't seem to be going into summer, rather back into the cooler months. We've taken a look back at the major events and hot topics of the past few months in 2023 to get a better understanding of the Crypto industry's trends and to draw some patterns to better look ahead.

January and February were the most active months for regulatory forces, with DCG under investigation by the US court, BUSD forced to stop issuing due to operational issues. There was good news, of course, as the Bitcoin network's emerging Oridinals made their debut, and the BRC-20 standard that evolved with them is still one of the hottest topics today. March saw Layer2 thrust into the limelight once again with the Arbitrum airdrop and the launch of the zkSync Era mainnet.

The Crypto market is gradually picking up, with the total market cap up over 50% by the end of April compared to the beginning of the year. Bitcoin outperformed the market average, with a market cap increase of nearly 80%.

The top 50 cryptocurrencies accounted for 96% of Crypto's total market cap, with Bitcoin accounting for 47%, up about 7% from 40% at the beginning of the year.

In 2023 Q1, centralized stablecoins are continuously in turmoil. Controversies have arisen regarding reserve management and censorship resistance of centralized stablecoins.

In Jan 2023, Binance admitted that BUSD had a flaw in its reserve management. And then on Feb 13, Paxos was being halted to issue more BUSD.

In March, due to the bankruptcy of Silicon Valley Bank and questionable reserves, the price of USDC fell to around $0.8 on Mar 11.

BUSD (-7.31%) and USDC (-8.91%) had significantly lost their market shares, while USDT (+14.88%) gained.

The market share of decentralized stablecoins is still small (5.65%) as of April despite increasing demand. And it did not gain benefits from the Q1 controversies.

On Jun 1, 2022, Optimism launched its airdrop officially. On Jan 12, 2023, the on-chain transaction reached a peak of 799K.

On Mar 23, 2023, Arbitrum conducted an airdrop to its community, which led to a significant increase in on-chain activity. By Apr 30, Arbitrum had surpassed both Optimism and Ethereum mainnet in daily transactions, reaching 1.25M transactions.

On March 24, zkSync Era mainnet is open to all users, making it the first zkEVM Layer2 protocol live on mainnet.

Several zkEVM Layer2 protocols, including StarkNet, Linea, Polygon zkEVM, and others, are currently in the betanet stage.

LayerZero, Aztec Network, ZetaChain, zkLink, and the BRC-20 standard-based tokens on the Bitcoin network are also worth waiting for.