2023 Provides Relief for the Crypto Industry
After a tumultuous 2022 for the crypto industry, 2023 provided some much-needed relief for its participants. From GBTC’s narrowing discount to Binance’s loss of market share, a USDC squeeze, the rise of Bitcoin NFTs, and the crypto market recovery, here are five charts to show how the industry changed last year.
GBTC’s Narrowing Discount to NAV
The Grayscale Bitcoin Trust (GBTC) discount fell to its lowest level in over two years following Grayscale Investments’ victory in August against the Securities and Exchange Commission over the conversion of its flagship GBTC product to a spot bitcoin ETF. The GBTC discount to net asset value (NAV) is trading below 10% for the first time since July 2021.
Binance’s Declining Market Share
Binance had a disastrous 2023 on the legal and regulatory front. U.S. authorities settled with Binance, concluding a criminal investigation into allegations of money laundering and sanctions violations. In Europe, Binance announced it was exiting the Netherlands after failing to acquire regulatory approval. Binance’s market share among non-USD exchanges slipped from over 70% at the start of 2023 to around 46% by the end of it.
USDC Gets Squeezed
USDC started 2023 with a 32% share of the stablecoin market but significantly depegged from the U.S. dollar in March, dropping to as low as $0.88. USDC’s market share has continued to be squeezed, falling to $26.2 billion (19%) of the total stablecoin supply as holders reallocated to other crypto assets or exited into fiat last year.
Bitcoin Helps Subdued NFT Sector Make a Comeback
Bitcoin made a comeback in the NFT sector with the launch of the Bitcoin Ordinals protocol. Inscriptions have also been spreading to other chains, causing a spike in transactions. Transactions on the Bitcoin network surged at various points last year, coinciding with pick-ups in inscriptions-related activity.
The Crypto Market Bounces Back
After a tumultuous 2022, the crypto market ended 2023 in a much better place. Bitcoin gained around 160%, Ether is up around 94%, and Solana was the biggest winner among the top ten cryptocurrencies by market cap, up nearly 1,000%.
Hot Take: A Promising Outlook for 2024
With anticipation over potential approval of a spot bitcoin ETF and the upcoming Bitcoin halving event, there will certainly be much more to talk about in 2024.
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