ANNUAL REPORT: CRYPTOCURRENCY MARKET IN 2023

Fumbi’s research team has prepared the Cryptocurrency Market Annual Report 2023. You will find all important information about market news, on-chain data, decentralized finance or NFTs in one place.

You can download our exclusive report by clicking on this link.

Market Capitalization of the Crypto Market

Source: Coinmarketcap

The value of the entire cryptocurrency market was at $793 billion in early 2023. Over the past calendar year, the crypto market capitalization grew 110% to a year-end level of $1.67 trillion. The highest market capitalization in 2023 was reached on December 28, 2023, at $1.69 trillion.

Bitcoin in 2023

Source: Messari

Bitcoin opened in 2023 at $16,531 and closed at $42,282. The value of bitcoin increased by 155.7% compared to the beginning of 2023. The rise in the value of bitcoin was driven in the first half of the year by the banking crisis in the United States and the subsequent euphoria surrounding the possibility of the approval of a spot bitcoin ETF in the United States. The victories of Ripple Labs and Grayscale in their lawsuits against the SEC also contributed to the positive market sentiment and the rise in Bitcoin’s price. The highest value of bitcoin this year was recorded on December 8, when the price of bitcoin climbed as high as $44,717.

Monthly Bitcoin Returns in 2023

Source: Fumbi Research

During this year, bitcoin has seen as many as 9 months with a positive monthly return and only 3 months with a negative monthly return. The best month of the past calendar year for bitcoin was the month of January, when bitcoin rose as much as 39.63%.

Highlights of 2023

U.S. Banking Crisis

Chaos, panic and uncertainty. This is a simple way of describing the March crisis of banking institutions in the United States and Europe. Following massive interest rate increases by the Fed, several major U.S. banks ran into trouble. The uncertainty in the banking sector subsequently spread from overseas to Europe and tested the stability of several European institutions.

For more on the banking crisis in the U.S., but also in Europe, see this link.

Approval of the European Cryptocurrency Regulation MiCA

In the second half of April, the European Parliament formally approved the MiCA (Markets in Crypto Assets) regulation, which introduces regulation of cryptocurrencies in the European Union. This regulation will allow central banks to license cryptocurrency businesses and ensure the security and fairness of the crypto services provided.

The approval and implementation of new cryptocurrency regulation in the European Union will entail a number of new rules and principles. The most important ones will concern entities that issue and trade cryptoassets (including reference asset tokens and e-money tokens). These entities will be obliged to implement new procedures and rules in order to increase transparency, disclosure of documents, authorization or oversight of transactions. In matters of transparency, they will have to publish all relevant information more transparently and unambiguously, so that consumers are accurately and clearly informed of the risks, costs or charges associated with their operation. 

Wondering what MiCA regulation will bring to the cryptocurrency market in the European Union? Read more at this link.

Ethereum Shanghai Update

On the night of Tuesday, April 12, 2023, a long-awaited update to the Ethereum network called Shanghai was successfully integrated. This update triggered the ability to withdraw staked ETH from the protocol, fully completing the Ethereum network’s transition to Proof-of-Stake.

The road to the Shanghai upgrade and the ETH stakeholder choice was long and full of trade-offs. Compromises were necessary especially on the part of the Ethereum network developers, who made several concessions just so that the update could be implemented as soon as possible. The Shanghai update was originally supposed to contain a number of other improvements, including the so-called proto-danksharding or a set of necessary updates for the Ethereum Virtual Machine (EVM). However, these enhancements have been removed from this update to ensure that ETH withdrawals are made available to users as soon as possible.

For more information from the world of cryptocurrencies from the past year, see our Cryptocurrency Market Annual Report 2023.

On-chain Data – BTC / ETH

BTC – Addresses Count

Source: Messari

The total number of addresses on the Bitcoin network has grown significantly over the past year. As we can see in the chart, the improved sentiment in the cryptocurrency market has had a very positive impact on the influx of new users. Indeed, in January 2023, the total number of addresses in the Bitcoin network stood at 43.48 million, while by the end of 2023, the total number of addresses in the Bitcoin network was already 52.33 million. Thus, the total number of addresses increased by up to 20% during 2023. The largest bitcoin address today is the cold storage address of the crypto exchange Binance, which currently holds up to 248,597 bitcoins worth more than $10 billion.

BTC – Balance on Exchanges

Source: Coinglass

The amount of bitcoins held in exchange wallets continued to trend downwards during 2023. Several factors contributed to this, such as the crash of the FTX crypto exchange in late 2022, which motivated many investors to move their assets to private wallets from other exchanges as well. Currently, there are roughly 1.88 million BTC on exchanges, down roughly 2% from early 2023.

ETH – Total ETH Staked

Source: CryptoQuant

According to data from analytics platform CryptoQuant, nearly 29 million ETH are currently staked on the Ethereum network, representing roughly 24% of the total circulating stock of Ether. This is a significant increase from early 2023, where just over 16.8 million ethers were staked as of January 1.

If you’re interested in the on-chain data of cryptocurrencies like Bitcoin and Ethereum, be sure not to miss our Annual Cryptocurrency Market Report for 2023.

DeFi Retrospective

Number of DeFi Apps Users

Source: Cryptobeholder

The DeFi sector continues to be one of the most popular and sought-after ways to interact in the cryptocurrency ecosystem. Based on data from Cryptobeholder’s “Total DEFI Users” metric, the DeFi sector added up to 13 million new users interacting with the DeFi world during 2023. Over the past year, after a very weak 2022, the sector has started to show signs of recovery again, but this is also related to the increased interest in Bitcoin and alternative cryptocurrencies. However, DeFi nowadays offers a huge number of options and innovative services, so it should come as no surprise that this field is gradually expanding among more and more users.

TVL by Chains

Source: Defillama

According to the Defillama portal, more than 200 networks are currently in operation, including Layer 2 (L2) scaling projects that provide users with access to a variety of DeFi services and applications. In terms of the top 10 networks (blockchains) in the DeFi space, we can see that Ethereum still firmly holds its market dominance in the total locked value (TVL) metric. There are currently more than $32.8 billion in total assets locked up on the Ethereum network, according to available information. The second largest network is the Tron network, with a total locked value of $7.2 billion. Rounding up the top three is the Binance Smart Chain (BSC) network, with a locked-in value of $3.4 billion.

For more information from the world of DeFi, including the most popular DeFi apps, the most popular decentralized exchanges, and an analysis of the Arbitrum protocol, check out our report available at this link.

Stablecoins Overview

Source: Coingecko

The year 2023 was a successful year for stablecoin adoption from our perspective. The largest stablecoin on the market in terms of market capitalization continues to be the USD Tether stablecoin (USDT), whose market capitalization reached $94 billion at the end of the year. During 2023, Tether’s capitalization grew by as much as 42%, as its capitalization was still around the $66 billion level at the beginning of 2023.

Do you own stablecoins? Read more about how stablecoins fared during 2023 in our report.

Fumbi in 2023

Advanced Portfolios

At the end of February, we introduced a new product – Advanced Portfolios, which gave our clients the opportunity to create their own diversified investment portfolios consisting of new and more exotic cryptocurrencies. The goal of this product is to provide our clients with greater freedom and flexibility to select and purchase cryptoassets that are consistent with their own preferences and investment strategies.

With this new feature, clients have the ability to build their portfolios with variable ratios for individual assets but also have access to investment templates created by the Fumbi team. These templates focus on different areas and ecosystems within the cryptocurrency world, giving our clients a wide range of options to choose from.

Gift Voucher

At the beginning of December, we brought another new product to the market in the form of Gift Vouchers. However, Fumbi Gift Vouchers are not just an ordinary gift. They represent an opportunity for your loved ones to start investing or expand their existing crypto portfolio.

Fumbi Celebrated Fifth Birthday

In early November, Fumbi celebrated its fifth birthday. Fumbi was born in 2018 with a simple goal: to make investing in cryptocurrencies safe and accessible for everyone. Currently, we can boast that our platform has become one of the key players in the cryptocurrency market in Slovakia and the Czech Republic. 

Five years may not seem like a long time, but it certainly is for a crypto startup. Let’s take a look at some of the major milestones we’ve achieved in that time:

• 130,000 registered users – the size and number of clients have raised us to the level of a smaller Slovak bank. Of course, we are still planning to grow and are preparing for the next bull run.
  
• 10 crypto products – 4 of which are for businesses. This year we launched a very successful product – Advanced Portfolios, because both Fumbi and our investors are gaining knowledge and experience that they want to use to create their own crypto portfolios, and this product allows them to do so.
  
• 6 supported languages – although we dominate the Slovak and Czech markets, we are trying to bring Fumbi to other customers in Europe. After launching on the Polish and Hungarian markets, we also added Greece this year.
  
• 4 major awards – in 2023 we again won the Superbrand award, adding it to our Deloitte – Technology Fast 50 and the Ministry of Economy’s Innovative Act of the Year awards.
  
• 9 successful crypto wallet audits – we continue to conduct independent audits of crypto wallets to transparently show how we manage and store our clients’ cryptocurrencies.
  

Want to know what we’ve been working on during 2023 to bring you the easiest and safest cryptocurrency investing experience? Read our Annual Cryptocurrency Market Report.

TAKE ADVANTAGE OF CRYPTO’S POTENTIAL