Binance Research: Key Trends in Crypto – August 2023
Main Takeaways
In this blog series, we offer concise summaries of Binance Research team’s findings, inviting you to take a deeper dive into the original reports.
This article previews the recent Binance Research report that discusses key developments in crypto from the past month.
While July 2023 was relatively slow, altcoins experienced a surge following favorable regulatory developments.
Thanks to Binance Research, you can take advantage of industry-grade analyses of the processes that shape what the Web3 space will look like tomorrow. By sharing these insights, we hope to empower our community with the latest knowledge from the field of crypto research. For a deeper dive, the full reports are available on the Binance Research website.
In financial markets, knowledge is power. Gone are the days when only big institutions and sophisticated financiers used high-quality research to navigate the digital asset space. Thanks to Binance Research, you can empower yourself with the latest data and insights from the field of crypto research.
Today, we will explore key Web3 developments in July 2023 to provide an overview of the crypto ecosystem’s current state. We will analyze the performance of crypto, DeFi, and NFT markets before previewing the major events to look out for in August.
Crypto Market Performance in July 2023
July 2023 was a relatively slow period for crypto markets, with overall capitalization increasing just 1.0%, the smallest monthly change for the year thus far. This was partly due to the anticipation surrounding exchange-traded fund (ETF) applications in June subsiding. Nevertheless, altcoins experienced an uptick in activity following the outcome of the U.S. Securities and Exchange Commission (SEC) case against Ripple, where the judge ruled that XRP was not a security when sold to the public on the secondary market.
Monthly change in crypto market capitalization (%)
Monthly price performance of the top 10 coins by market capitalization
Source: CoinMarketCap (July 31, 2023)
XRP was the strongest performer in July, with its price rising a considerable 47.4% after a favorable ruling in the SEC v. Ripple case. The resulting momentum reverberated across the altcoin space, increasing the prices of other tokens such as SOL and MATIC. With Twitter rebranding to X, memecoin DOGE also saw a significant rise in price, apparently due to its perceived association with X’s owner Elon Musk.
BTC and ETH were the weakest performers among the top 10 coins by market cap, declining 4.1% and 4.0% in price, respectively. Following a flurry of spot Bitcoin ETF applications in June, the excitement has gradually died down as investors now await the SEC’s upcoming decisions on them.
Decentralized finance (DeFi)
DeFi markets fell by 7.7% in total value locked (TVL) to $40.8B. The composition of top blockchains by TVL remained generally unchanged, with Ethereum at 56.0%, Tron at 14.2%, and BNB Chain at 8.2%.
TVL share of top blockchains
Source: DeFiLlama (July 31, 2023)
Throughout the year, TVL in DeFi has declined significantly, with TVL on Ethereum falling a further 12.0% to $22.9B in July. Additionally, various DeFi protocols suffered hacks, leading to tens of millions in losses. Curve’s TVL fell 56.6% due to a $70M reentrancy attack, causing a contagion effect in protocols that rely on its liquidity. This included Convex Finance, which declined 58.2% in the same period. Elsewhere, Multichain suffered a $130M exploit, causing Fantom’s TVL to fall below $65M.
Non-fungible tokens (NFTs)
Monthly trading volume for NFTs
Source: Cryptoslam (July 31, 2023)
NFT trading volume continued to fall, with Nansen’s NFT-500 and Blue-Chip-10 indexes extending their declines. This trend was consistent with previous months, and a new all-time low for both 2022 and 2023 was reached in July. This year has been difficult for NFTs thus far, and the sector is clearly underperforming, particularly when compared with the overall rise in crypto market capitalization.
Upcoming Events
To help users stay updated on the latest Web3 news, Binance Research has summarized notable events and token unlocks for the month to come. Keep an eye on these upcoming developments in the blockchain space.
Notable events in August 2023
Source: Binance Research
Largest token unlocks in US$ terms
Source: TokenUnlocks, Binance Research
Binance Research
The Binance Research team is committed to delivering objective, independent, and comprehensive analyses of the crypto space. They publish insightful takes on Web3 topics, including but not limited to the crypto ecosystem, blockchain applications, and the latest market developments.
This article is only a snapshot of the full report, which contains further insights and an analysis of the most important market charts from the past month. It also features a deeper dive into Telegram bots, real-world assets, the layer-2 landscape, and more. With so much rich content, you won’t want to miss these exclusive insights.
To read the full version of this report, click here. Additionally, you can find other in-depth investigations of the latest Web3 developments by visiting the Insights & Analysis page on the Binance Research website. Take the opportunity to empower yourself with the latest insights from the field of crypto research!
Further Reading
General Disclosure: This material is prepared by Binance Research and is not intended to be relied upon as a forecast or investment advice and is not a recommendation, offer, or solicitation to buy or sell any securities or cryptocurrencies or to adopt any investment strategy. The use of terminology and the views expressed are intended to promote understanding and the responsible development of the sector and should not be interpreted as definitive legal views or those of Binance. The opinions expressed are as of the date shown above and are the opinions of the writer; they may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Binance Research to be reliable, are not necessarily all-inclusive, and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given, and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Binance. This material may contain ‘forward-looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, cryptocurrencies, or any investment strategy, nor shall any securities or cryptocurrency be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase, or sale would be unlawful under the laws of such jurisdiction. Investment involves risks.