After a tumultuous 2022 for the cryptocurrency industry, 2023 brought much-needed relief to participants.
From GBTC's shrinking discount to Binance's loss of market share, USDC's squeeze, the rise of Bitcoin NFTs and the recovery of the crypto market, here are five charts that show how the industry has changed over the past year.
Reduced discount rate of GBTC to NAV
The Grayscale Bitcoin Trust (GBTC) discount follows Grayscale Investments' victory in August against the Securities and Exchange Commission over the conversion of its flagship GBTC product into a spot Bitcoin ETF. It has fallen to its lowest level in more than two years.
GBTC is trading at a discount to its net asset value (NAV) (meaning how much less each stock's market price is than the value of the Bitcoin it represents). less than 10% First time since July 2021.
GBTC is currently trading at a discount as its shares cannot be redeemed, and the only option is to sell it to another potential buyer. However, until the crypto credit crunch in 2021, it had historically traded at a premium.
This trend, which has seen discounts narrowing from more than 40% before BlackRock and others filed their Spot Bitcoin ETF application in June, could lead to the SEC's decision to open a Spot Bitcoin ETF in the U.S., including the potential conversion of GBTC. This is considered to be a sign that there is growing optimism that approval will be granted.
GBTC is up over 320% in one year, compared to 160% for Bitcoin. according to Go to TradingView.
Binance’s market share declines
Binance had a disastrous regulatory outcome in 2023.
In November, U.S. authorities including the Justice Department, Treasury Department, and Commodity Futures Trading Commission reached a settlement with Binance, ending a criminal investigation into alleged money laundering and sanctions violations, making it one of the largest corporate settlements in U.S. history. Ta. The settlement included a $4.3 billion fine and criminal charges against former CEO Zhao Changpeng. Mr. Zhao agreed to step down as CEO as part of a plea deal with the Justice Department. Mr. Zhao has pleaded guilty to violating the Bank Secrecy Act and will pay a $50 million fine, with a sentencing hearing scheduled for February.
In the U.S., the SEC also filed a lawsuit against Binance in June, alleging that the company violated U.S. securities laws, which regulators say will prohibit Binance and Zhao from doing any future business in the U.S. are doing. by the Commodity Futures Trading Commission in March.
In Europe, Binance announced it would withdraw from the Netherlands after failing to obtain regulatory approval. He has also applied for the deregistration of his local subsidiary in Cyprus and is reportedly under investigation in France on suspicion of money laundering.
Binance.US has cut its workforce following the SEC's lawsuit against the company, but its business has also shrunk as its customers can no longer use US dollars to buy cryptocurrencies on the platform. The company laid off one-third of its remaining employees in September, and Binance.US President and CEO Brian Schroeder also left the company amid uncertainty and declining performance.
Binance itself has laid off at least 1,500 staff, including global product head Mayur Kamat, Asia-Pacific head Leung Fung, chief strategy officer Patrick Hillman, and general counsel Hon. The departure of high-profile executives, including Mr. Ng and chief business officer, made headlines. Yibo Lin.
As a result, Binance's market share among non-USD exchanges fell from more than 70% at the beginning of 2023 to around 46% by the end of 2023, according to The Block's data dashboard.
USDC is under pressure
USDC issued by Circle started 2023 with a 32% share of the stablecoin market, according to data from The Block. This represents $48.1 billion of the total supply of $153.1 billion on January 1st, with 50% ($75.7 billion) in USDT issued by Tether and 4% ($5.8 billion) in the decentralized DAI stablecoin. It was the third largest.
Fast forward to March, and USDC was significantly unpegged from the US dollar, falling to $0.88 after Circle announced it would hold $3.3 billion in reserves in a failed Silicon Valley bank. This disclosure caused a significant selloff, with investors turning to other stablecoins such as Tether's USDT or exiting the cryptocurrency market altogether, with USDC's market capitalization dropping 15% in just 24 hours. did. The situation was further complicated by major exchanges such as Coinbase and Binance suspending USDC conversion amid the turmoil.
Since then, USDC's market share has remained under pressure, with holders reallocating to other crypto assets or exiting to fiat last year, with $26.2 billion (19 %).
USDT strengthened its dominance both in percentage and value, reaching 71% of the market with a supply of $98.6 billion. While DAI has remained relatively flat, new entrant First Digital USD (FDUSD) has gained $1.8 billion, or 1.3% of the market, after a steady start. Binance encouraged users to convert to FDUSD in August as support for Binance USD (BUSD) is phased out after issuer Paxos stopped minting new BUSD tokens in early 2023. .
Bitcoin helps revive ailing NFT sector
Bitcoin was not previously known for NFTs, with users preferring blockchains like Ethereum and Solana to trade and mint assets. That was until Ordinals exploded onto the scene last year, making it easier and cheaper to post completely on-chain NFTs to the blockchain.
Launched in January 2023 by Casey Rodarmor, the Bitcoin Ordinals protocol provides a new way to store and trade digital content with Bitcoin. Satoshi, the smallest unit of Bitcoin, allows users to inscribe NFTs, BRC-20 tokens, and any other arbitrary data directly onto the blockchain, making each piece a unique and tradable asset. .
The terms “ordinal” and “inscription” are often used interchangeably, but an ordinal is technically a unique serialized identifier for a single satoshi, and an inscription is a unique serialized identifier attached to that particular satoshi. Content or data.
Inscription has spread to other chains in recent weeks, including Ethereum, Solana, Near, Polygon, Cero, and Phantom, causing a surge in transactions as debate continues over Inscription's use. Some see these as “spam” that should be eradicated, while others see them as legitimate use cases that help Bitcoin's long-term security by increasing the proportion of miners' transaction fees compared to decreasing block rewards. There are some too.
Transactions on the Bitcoin network spiked at various points last year coinciding with an increase in inscription-related activity, reaching a record high of 633,000 average daily transactions in December, and NFT trading volume It reflects that influence.
NFT trading volumes have been on a downward trend since February, and the overall recovery coincided with an increase in Bitcoin activity. A recent surge in demand for inscriptions pushed this metric to its highest point of the year in mid-December, with Bitcoin-based NFTs accounting for approximately 59% of the $518 million in weekly NFT trading volume at its peak.
Cryptocurrency market recovers
After the trials and tribulations of a turbulent 2022 for the crypto market, 2023 ended on a better note. Bitcoin has appreciated about 160% since opening at $16,600 in 2023, according to price data from The Block. Ether has lagged behind the top cryptocurrencies by market capitalization since March, but is still up about 94% from $1,200 a year ago.
Although the DeFi sector got off to a strong start in 2023, both Bitcoin and Ether have underperformed since the spring. However, it still ended the year up about 67%.
Solana was the biggest winner among the top 10 cryptocurrencies by market capitalization, rising nearly 1,000% from less than $10 as of January 1, 2023.
With the possible approval of a Spot Bitcoin ETF and expectations for the upcoming Bitcoin halving event, there is no doubt that there will be even more buzz in 2024.
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