Crypto Market Cap Surpassed $1T, Bitcoin Reigned Supreme During Q1

Bitcoin, DEXs, DeFi and NFTs are all big winners

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Sittipong Phokawattana/Shutterstock modified by Blockworks

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Crypto’s total market cap reached $1.2 trillion by the end of Q1 2023, driven by a temporary boost in daily trading volume following the banking failures in early March, according to a CoinGecko report.

The report also found that bitcoin (BTC) still reigns supreme, outperforming the NASDAQ, gold, and crude oil. It notched a quarter on quarter gain of 72.4%.

Joshua Frank, co-founder and CEO of The Tie, told Blockworks that bitcoin led the overall crypto recovery in the first quarter.

“Bitcoin’s strength this year has come on the back of the banking scandal as investor sentiment shifted towards viewing BTC as a hedge against banks, as nervous investors looked for relative safe havens to move capital out of stablecoins [and] as Circle and other issuers have faced uncertain banking situations,” Frank said.

Speaking of stablecoins, this asset class erased $6.2 billion in value in the first quarter. The report cited the USDC depegging following SVB’s collapse and Paxos ceasing to mint BUSD in February, as major causes for the downturn. 

The report also delved specifically into the growth of DeFi and DEXs. As a sector, DeFi’s market cap swelled over 65%, translating into nearly $30 billion in gains. Despite the gains, DeFi only accounts for less than 5% of crypto’s overall market cap, according to Frank.

Still, there were gains nonetheless, and they were possible because of the growth of liquid staking governance tokens such as Lido DAO (LDO) and Rocket Pool (RPL), which have jumped approximately 135% and 167%, respectively, since the start of 2023.

“With the confirmation of Ethereum’s Shapella upgrade, liquid staking governance tokens saw a 210.9% increase in market cap in Q1. It has now surpassed lending protocols to become the 3rd largest category in DeFi,” the report said.

DEX governance tokens instead faltered, losing 5% of their market share since January. 

On the NFT front, trading volume for the digital asset surged 68% to $4.5 billion in the first quarter from $2.1 billion last quarter. Blur additionally overtook OpenSea as the most popular NFT marketplace in Q1. OpenSea’s rebranded release of its pro platform is not reflected in CoinGecko’s report, however.

Blockworks previously reported on an early April report which showed that 75% of crypto holders own NFTs — potentially another sign that the segment’s crypto winter is coming to a close.


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