Cryptocurrency market analysis platform CoinGecko has detailed the industry's growth in 2023 amid optimism and anticipation regarding several events this year, including the recent approval of Bitcoin spot exchange-traded funds (ETFs) and the upcoming Bitcoin halving.
According to the report, the market has seen significant growth in several areas, including decentralized finance (DeFi), non-fungible tokens (NFTs), centralized exchanges (CEXs), and decentralized exchanges (DEXs).
The market capitalization of cryptocurrencies increased by 2.6 times
During 2023, the cryptocurrency ecosystem more than doubled its total market capitalization, rising by 108% from the $832 billion recorded at the beginning of the year. Most of the growth occurred in the fourth quarter when optimism surrounding the potential approval of spot Bitcoin ETFs increased, sending the market cap up 55% from $1.1 trillion to more than $1.7 trillion.
CoinGecko attributed the rise in market capitalization to Bitcoin's (BTC) impressive comeback, with assets rising from $27,000 to $42,000 in the fourth quarter and recording 155% growth over the year.
“BTC had a strong rally in Q1, rising +72.4%, followed by another surge in Q2. It then retreated in Q3, falling -11.5%, before rising in Q4. Likewise, average trading volume declined Bitcoin at around the end of Q1 and gradually declined in Q2 and Q3. “It then rose in Q4 to $18.0 billion, an increase of +64.3% QoQ,” analysts said.
Other crypto assets such as Ethereum (ETH) and Solana (SOL) have also posted impressive gains in the past year. The former rose 90.5%, closing the year at $2,294, while the former rose more than 900% and ended the year at $103.
The CEX exchange dominates cryptocurrency trading volume
Furthermore, the cryptocurrency market saw a trading volume of $36.6 trillion in 2023, with the most impressive growth in Q4, an increase of 53.1% from $6.7 trillion in Q3 to $10.3 trillion. Q4 2023 saw the first quarter-on-quarter growth of the year, stemming from excitement around ETFs.
CEXs dominated trading volume despite regulatory hurdles faced by the largest cryptocurrency exchange, Binance, and the collapse of FTX the previous year.
Meanwhile, NFT trading volume declined, ending the year at less than half the number recorded in 2022. The volume of the 10 largest chains reached $11.8 billion, while the volume of the previous year was $26.3 billion.
