Quarterly Report on the Cryptocurrency Market – Q2/2023

In the second quarter of this year, cryptocurrencies and especially Bitcoin continued their upward trend and achieved interesting price appreciation, although the US Securities and Exchange Commission (SEC) has started to escalate its anti-crypto policy and accused several large crypto exchanges, including Binance or Coinbase, of violating securities laws and other misdeeds. Indeed, the US regulator‘s actions against the crypto sector have been intense in recent months, and some politicians in the United States are already calling for the removal of commission chairman Gary Gensler and calling for structural changes at the agency.

You will also find this information in the full report:

• During the second quarter, the price of Bitcoin increased by 8.47% from $28,459 to $30,880 as of June 30, 2023. The cryptocurrency Ethereum also experienced a similar price trend, rising by 4.47% to $1,902 in the second quarter.
  
  
• The European Union opens the door to cryptocurrencies – the Markets in Crypto Assets
  (MiCA) regulation has been officially approved and published in the Journal of the European
  Union.
  
  
• The US Securities and Exchange Commission (SEC) has declared war on cryptocurrencies. It has
  charged the two largest crypto exchanges and designated more than 60 cryptocurrencies as
  securities.
  
  
• The issuer of the largest USDT Tether stablecoin is switching to the Bitcoin standard. It plans regular
  purchases of Bitcoin as well as its mining in Uruguay.
  
  
• Parliament voted to reduce the tax burden on the sale of cryptocurrencies in Slovakia. How did it
  turn out?
  
  
• Bitcoin is reaching new highs in multiple metrics. Both the hashrate and the number of daily
  transactions are rising, and the amount on exchanges is falling.
  
  
• Arbitrum has become the fourth largest blockchain in terms of total locked-in value (TVL) in the
  DeFi sector.
  
  
• Tether remains the largest stablecoin on the market, but BUSD and USDC have deteriorated
  significantly.

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Bitcoin Price Development

Source: Messari

The second quarter of 2023 was marked by growth in the cryptocurrency market and renewed interest from
both retail and institutional investors. The price of Bitcoin increased by 8.47% between the months of April
and June from $28,459 to $30,880. Bitcoin reached its three-month high on June 23, when it traded at nearly
$31,389. Following the U.S. Securities and Exchange Commission (SEC) charges against Binance, the price of
Bitcoin plunged to a three-month low of $24,811.

Evolution of Cryptocurrency Market Capitalization

Source: Coinmarketcap

The market capitalization of the cryptocurrency market was $1.18 trillion at the beginning of the third quarter.
Following the growth in market capitalization in the first quarter, there was mostly a sideways movement
during the months of April to June, and the market capitalization mostly oscillated between $1 trillion and
$1.2 trillion. At the end of the first quarter, the total market capitalization was $1.19 trillion.

You can read the evolution of Bitcoin’s dominance or the performance of the TOP 10 altcoins on the market in our quarterly cryptocurrency market report.

Highlights From the Crypto World

Approval of the MiCA Regulatory Framework

In the second half of April, the European Parliament officially approved the MiCA (Markets in Crypto Assets) regulation, which introduces regulation of cryptocurrencies. This regulation allows 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. Read more in our comprehensive cryptocurrency market report.

Ethereum Shanghai Update

On the night of Tuesday, April 12, 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 developers, who made several concessions just so that the update could be implemented as soon as possible.

BlackRock Has Applied to Create a Spot ETF

In mid-June, BlackRock, the world’s largest institutional asset manager, jumped into the race to launch the first bitcoin spot exchange-traded fund (ETF) in the United States. 

BlackRock has already officially applied to create an exchange-traded fund (ETF) based on the largest cryptocurrency on the market, Bitcoin. The chances of it being created and launching the first-ever spot Bitcoin ETF are high this time around, according to experts, as BlackRock is the largest institutional asset manager in the world with a well-established name and well-functioning relationships with regulators.

What could the launch of a spot BTC ETF in the US bring and how will it affect cryptocurrencies? Read more in our quarterly cryptocurrency market report.

DeFi

Total Value Locked (TVL)

Source: Defillama

The total value locked up in the DeFi sector during the second quarter fell from the $49 billion recorded at the end of May 2023 to approximately $45 billion at the end of June. The largest network, according to TVL, is currently Ethereum, which has 26 billion in locked funds with a market share of 58.75%. In second place in terms of TVL is the Tron network, on which $5.6 billion is locked with a market share of 12.5%. Rounding out the top three is Binance Smart Chain with a TVL of $3.38 billion and a market share of 7.56%.

Stablecoins and DeFi

The largest stablecoin in the cryptocurrency sector continues to be Tether (USDT) with a market capitalization of $83 billion. Tether’s capitalization has increased by 3.75% since the beginning of April this year. The second largest stablecoin remains Circle’s USDC stablecoin, with a market capitalization of $28.4 billion. However, USDC’s market capitalization fell by as much as 12% during the second quarter, as USDC’s market capitalization stood at $32.5 billion as recently as the beginning of April. USDC’s market capitalisation thus reached an 18-month low.

Source: Coingecko

For more information from the DeFi, Metaverse or on-chain data sectors, please see our full report. In addition, the report covers other important news from the world of cryptocurrencies, such as MiCa regulation, Ledger’s PR disaster or the new taxation of cryptocurrencies in Slovakia, which will be effective as of January 2024.

Download the report here.