Bitcoin and liquid staking protocols lead crypto resurgence in Q1

In retrospect, the first quarter of 2023 can be characterized as the resurrection of bitcoin (BTC) and the entire crypto market. After the crypto market as a whole had started a downward trend since November 2021, it reached its lowest point a year later. However, the turn of the year seems to have been a true turning point, in which the way upwards has clearly been found again.

Bitcoin ended the first three months of the year in the green with 72%, making it the best performing asset of the first quarter. In addition, the decentralized finance (DeFi) sector also to focus attention, with liquid strike protocols in particular.

Bitcoin and liquid staking dominate the crypto resurgence

CoinGecko sums up all the performance across the first quarter crypto landscape in its ‘2023 Q1 Crypto Industry Report‘.

The crypto market has seen a quarter of a revival, with a total market cap of $1.2 trillion at the end of March. CoinGecko highlights a 48.9% increase as its total market cap still stood at $829 billion at the end of 2022.

Besides bitcoin, the DeFi sector was another notable player with an increase of $29.6 billion in Q1. The report cites the impressive performance of liquid strike governancetokens, which saw a 210% increase in market cap since the start of the year.

Ethereum’s (ETH) long-awaited Shapella update played a major role in the growth in demand for liquid staking. Since the hard fork from April 12, it is finally possible to withdraw ethereum from the staking contracts. The report notes that liquid staking is now the third largest category in the DeFi sector.

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NFT market is rising, stablecoins are having a hard time

At the same time as crypto’s resurgence, demand for non-fungible tokens (NFTs) has also increased significantly since the start of the year. The trading volume has increased by 68% compared to the last quarter of 2022.

However, the stablecoin market has endured significant blows in the first three months of the year. The market cap of the top 15 stablecoins has fallen by a total of $6.2 billion. This 4.5% drop is related to the issues surrounding Binance USD (BUSD) and USD Coin (USDC). Paxos, the company behind the BUSD stablecoin, was targeted by the US Securities and Exchange Commission (SEC) and is no longer issuing new BUSD. In addition, USDC temporarily lost its peg to the US dollar after it was found to have exposure to the bankrupt Silicon Valley Bank (SVB).

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