Bitcoin, DeFi space see light, NFT market declines in Q3

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In July, the cryptocurrency market cap reached a low of $903 billion, but it recovered significantly in Q3 and reached $1.2 trillion in August.

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Updated: October 19, 2022 at 9:00 pm

Bitcoin, DeFi space see light, NFT market declines in Q3

Cover art/illustration via CryptoSlate

Xeggex

Coingecko released a report about the current state of the digital asset industry for the third quarter of 2022, which indicates a quieter environment than what was experienced in Q1 and Q2.

The most notable of the pointers in the recent release is how the cryptocurrency market cap made an encouraging recovery.

As outlined in the report, on July 19, the cryptocurrency market cap reached a low of $903 billion. However, it recorded a notable recovery in Q3 as it went up to $1.2 trillion in August. Though the figure dipped towards the end of the quarter, it ended with $100 billion above what was recorded at the end of the previous quarter.  

Bitcoin Outperforms Other Assets Except for the USD

Despite enduring a turbulent period in Q3, Bitcoin did well against other asset classes, excluding the US Dollar Index. Compared to US equities, Bitcoin dipped but still managed a remarkable recovery against the equities market as it ended Q3 with a minimal 1% price deficit.

One of the most notable findings in the report is the poor performance of stablecoins. The market cap of the top 15 stablecoins dropped by 3% QoQ. The dip isn’t far-fetched, as the USDC market dropped by 16% following the ban on Tornado cash by the United States Office of Foreign Assets Control.

Meanwhile, BUSD gained from the shortfalls of USDC, as its market cap grew by 18%. Also, this positive development for BUSD coincided with Binance’s unveiling of the Auto-conversion of BUSD.

 DeFi Recovers as NFT Market Hits a New low for 2022

On a QoQ, the DeFi market cap rebounded by 31%. The figure replicates a laudable recovery because most DeFi projects recovered from their shortfalls. Further, Decentralized exchanges retained their fame as the biggest component of DeFi.

On the contrary, a fall in trading volume across the Top 5 NFT marketplaces, like OpenSea, Magic Eden, LooksRare, etc., affected the general NFT space. As a result, the industry recorded a 77% plunge in trading volume, representing a new low for 2022. 

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