According to the recent report by CoinGecko, after nearly reaching all-time highs in the first quarter of 2024, the total crypto market capitalization underwent a correction in Q2, decreasing by -14.4% and closing at 2.43 trillion dollars in June.
This decline marked a phase of consolidation after the exuberance of Q1, during which the approval of US spot ETFs on Bitcoin had stimulated a strong bull.
From Bitcoin to the crypto market: the report by CoinGecko
One of the most anticipated events of the quarter was the fourth halving of Bitcoin, which took place without technical hitches. Each halving reduces the reward for mining new blocks by 50%, an event that has historically had a significant impact on the price of Bitcoin. However, the market’s response to the event was modest, with Bitcoin experiencing rather unstable performance throughout the quarter. The price of Bitcoin fluctuated between $58,000 and $72,000, closing the quarter with a loss of 11.9%, just below its all-time high of $73,000.
Despite the importance of the halving, the hash rate of Bitcoin mining has experienced a decrease of -18.8%, marking the first quarterly decline since Q2 of 2022. This decline could be attributed to various factors, including the increase in energy costs and new regulations in some jurisdictions that have made mining less profitable.
The Market Overview
The CoinGecko report offers a comprehensive analysis of the cryptocurrency market, covering several key areas:
Market Capitalization: The total market capitalization of cryptocurrencies has decreased by -14.4%, in contrast to the S&P 500 which recorded an increase of +3.9%. This comparison highlights the intrinsic volatility of the cryptocurrency market compared to traditional markets.
Dominant Categories: The main categories that attracted the most web traffic in Q2 2024 were Meme Coin, Artificial Intelligence (AI), and Real-World Assets (RWA), representing 77.5% of the traffic. These categories saw an increase in interest due to innovative developments and new applications in the sector.
Ethereum: Ethereum has recorded an increase in supply of 120.8K ETH, as emissions have exceeded burns. This increase reflects the ongoing activity on the network, with strong usage of decentralized applications (dApp) and DeFi platforms.
Centralized and Decentralized Exchanges: The volume of spot trades on centralized exchanges (CEX) decreased by -12.2% compared to Q1 of 2024, reaching 3.40 trillion dollars. In contrast, the volume of trades on decentralized exchanges (DEX) increased by +15.7%, reaching 370.70 billion dollars. This increase was driven by a surge in meme coins and airdrops, which attracted a large number of traders to DEX platforms.
DeFi and NFT
Q2 of 2024 also saw a continued evolution of decentralized finance (DeFi) ecosystems and non-fungible tokens (NFT). DeFi continued to grow, with new protocols and solutions attracting significant capital. DeFi protocols introduced new products and improved interoperability between different platforms, making the sector more attractive to institutional and retail investors.
The NFT market has maintained its momentum, with artists, musicians, and content creators launching new collections and projects. Interest in NFTs has also been sustained by the adoption by brands and celebrities, who have used these tokens to engage their fans in innovative ways.
Conclusions and perspectives
Q2 2024 was a quarter of consolidation for the cryptocurrency market, characterized by a decline in market capitalization and an unstable performance of Bitcoin. However, despite these challenges, the sector continued to innovate and evolve, with a growing adoption of DeFi and NFT technologies, as well as an increase in activity on decentralized exchange.
Looking to the future, the cryptocurrency sector remains dynamic and full of opportunities. Volatility is an intrinsic characteristic of this emerging market, but continuous innovation and growing adoption suggest that cryptocurrencies will continue to play a central role in the global financial landscape.
For a complete understanding of the dynamics of Q2 2024, it is recommended to examine the 51 slides of the CoinGecko report, which offer a detailed and in-depth analysis of the various segments of the cryptocurrency market.