CoinGecko, a platform for analyzing the crypto market, has released a report on the industry’s growth in 2023, during which there was optimism and anticipation for various events, including the recent approval of spot Bitcoin exchange-traded funds (ETFs) and the upcoming Bitcoin halving.
The report highlights significant growth in several areas, including decentralized finance (DeFi), non-fungible tokens (NFTs), centralized exchanges (CEXs), and decentralized exchanges (DEXs).
Crypto Market Cap Increased 2.6x
In 2023, the overall market cap of the crypto ecosystem more than doubled, increasing by 108% from $832 billion at the beginning of the year. The majority of this growth occurred in Q4 when optimism about the potential approval of spot Bitcoin ETFs led to a 55% increase in market cap, taking it from $1.1 trillion to over $1.7 trillion.
CoinGecko attributed the rise in market cap to Bitcoin’s impressive resurgence, with the asset rising from $27,000 to $42,000 in Q4 and growing by 155% throughout the year.
“BTC had a strong first leg up in Q1, rising +72.4%, followed by another spike in Q2. It then pulled back in Q3, dropping -11.5%, before rallying in Q4. Similarly, the average trading volume of BTC dropped off around the end of Q1 and gradually declined in Q2 and Q3. It then picked up in Q4 to $18.0 billion, a gain of +64.3% QoQ,” analysts said.
Other crypto assets such as Ether (ETH) and Solana (SOL) also saw notable gains last year. Ether rose by 90.5%, closing the year at $2,294, while Solana surged by over 900% and ended the year at $103.
CEXs Dominated Crypto Trading Volume
Moreover, the crypto market witnessed a trading volume of $36.6 trillion in 2023, with significant growth observed in Q4, where volume increased by 53.1% from $6.7 trillion in Q3 to $10.3 trillion. This marked the first quarter-on-quarter growth of the year, driven by excitement surrounding ETFs.
Despite the regulatory challenges faced by the largest crypto exchange, Binance, and the collapse of FTX the previous year, centralized exchanges (CEXs) continued to dominate the trading volume.
Meanwhile, NFT trading volume decreased, with the total volume of the top 10 chains amounting to $11.8 billion, compared to $26.3 billion in the previous year.
Image Source: Matyuschenko / Shutterstock
