Binance released the first half of 2023 report which revealed Bitcoin market dominance reached the highest level since April 2021, while its year-to-date price performance of more than 87% significantly outperformed many common TradFi investments. The global stablecoin market capitalization has dropped by 7.0%, but USDT’s market share has increased significantly by 25.8%. The performance of NFTs has lagged the overall cryptocurrency market. The infrastructure sector attracted the most investment, followed by gaming/entertainment and DeFi.
In the first half of 2023, the crypto market overcame various challenges, showing resilience as the crypto market capitalization finished the period with positive numbers. Bitcoin, rising 87% year-to-date, exhibited its highest market dominance since April 2021 and a multi-year low correlation with traditional finance (TradFi). The Bitcoin ecosystem experienced a renewed energy from Ordinals and Inscriptions, with anticipated innovation in the coming months.
Layer 1 (L1) networks had an eventful half-year, with Ethereum reaching new liquid staking highs, BNB Chain focusing on scalability, and Solana releasing a Web3 phone after recovering from a troubled 2022. Tron's USDT dominance grew, while Avalanche advanced on subnets and corporate partnerships, and Cosmos progressed on shared economic security models.
Optimistic rollups dominated, and the zero-knowledge (ZK) world witnessed the launch of the first fully functional zkEVMs. Visions for the future among major players increasingly centered on networks of blockchains, such as L3s, Superchains, and Hyperchains.
Global stablecoin market value fell by 7.0%, although shifts in trends, regulations, and players' approaches reshaped market composition. USDT saw a 25.8% YTD increase in market share, parting from the major trio of stablecoins.
DeFi experienced notable developments, driven by the rapid rise of liquid staking and a user migration towards decentralized exchanges (DEXes). However, DeFi's dominance declined by 0.5% compared to the global crypto market.
NFT trading volume increased in H1 2023 compared to H2 2022, primarily due to the Blur marketplace's early-year activity, but NFTs underperformed the broader crypto market. Concurrently, gaming-related tokens experienced price growth, with over 67% of games built on BNB Chain, Ethereum, and Polygon.
H1 2023 also saw a decline in overall crypto deal activities and venture capital funding, with the infrastructure sector attracting the most investment, followed by gaming/entertainment and DeFi.