CoinGecko 2023 Q3 Crypto Industry Report reveals key insights on stablecoins, with a focus on Tether, and provides a detailed analysis of the evolving crypto landscape.
This article provides a summary of the report’s key findings, focusing on the state of stablecoins in Q3 2023.
Summary
Coingecko’s report on the crypto industry, Tether and other stablecoins
The third quarter of 2023 saw a significant shift in the cryptocurrency market, marked by a sudden downturn in mid-August.
This downturn split the quarter into two distinct periods, with the value of Bitcoin dropping significantly from around $29,000 to $26,000 in a single day.
This event caused the total capitalisation of the cryptocurrency market to fall from $1.2 trillion to $1.1 trillion.
Despite the lack of major market news on that fateful day, traders seemed to wind down their activities for the rest of the summer.
In the third quarter of 2023, the total market capitalisation of cryptocurrencies fell significantly by almost -10%, or $119.1 billion in absolute terms.
Since the local market peak in April, total market capitalisation has declined by -16.3%. Trading volumes have continued to decline, with the average daily trading volume in Q3 2023 being $39.1 billion, down 11.5% from Q2.
This period also saw significant changes within the top 30 cryptocurrencies, with Solana rising to 7th place and TrueUSD rising to 19th place. In contrast, Litecoin, Avalanche and Binance USD saw their rankings drop.
Stablecoins in Q3 2023
Stablecoins, a crucial component of the cryptocurrency ecosystem, saw their market capitalisation fall by 3.8% in Q3 2023. The total market capitalisation of stablecoins now stands at $121.3 billion.
Notably, Tether’s (USDT) market cap remained stable in Q3, while it managed to secure a 2.6% increase in stablecoin market share.
In contrast, USD Coin (USDC) suffered the largest absolute loss at -$2.26 billion (-8.3%), while Binance USD (BUSD) suffered the largest percentage decline at -45.3%, down $1.87 billion.
A notable exception among the top 5 stablecoins was TrueUSD (TUSD), which saw a notable increase in market cap with a gain of $0.39 billion (+12.8%).
Outside the top 5, several new entrants to the stablecoin space made their mark, such as PayPal’s First Digital USD (FDUSD), crvUSD (CRVUSD) and PYUSD.
At the same time, Frax (FRAX), Paxos (USDP) and Gemini Dollar (GUSD) suffered significant losses in market cap: On-chain RWA activity
A surprising development in the cryptocurrency sector in Q3 2023 was the rise of tokenised US government securities as a significant driver of on-chain RWA (real world assets).This market value increased from $114.0 million in January 2023 to $665.0 million at the end of September, a 5.84-fold increase.
Traditional financial institutions have driven this growth and the number of projects offering T-bill tokens has tripled, with Franklin Templeton holding a substantial 46.6% of the total market share, followed by Ondo Finance with 26.8%.
Newer protocols such as Backed Finance and OpenEden have also started to gain traction, ending September with market shares of 7.11% and 1.73% respectively.
Trading volume of NFTs and on centralised exchanges (CEXs)
Non-fungible tokens (NFTs) experienced a significant decline in trading volume in Q3, with a significant drop of 55.6%. Volume fell from $3.67 billion in Q2 to $1.63 billion in Q3.
Ethereum maintained its dominance in the NFT market, accounting for 83.2% of market share in Q3.
Bitcoin took 5.6% of the market share in the same period, although its dominance declined slightly from its peak in May.
In particular, ImmutableX NFTs flourished in Q3, with monthly trading volume averaging over $20 million and market share increasing from 2.1% in Q2 to 3.9% in Q3.Â
This success can be attributed to the launch of the Gods Unchained trading card game on the Epic Games Store, which launched its game marketplace in August.
In Q3, spot trading volumes on the top 10 centralised cryptocurrency exchanges (CEXs) fell by 20.1% to a total of $1.12 trillion.
Binance, one of the largest exchanges, faced increased regulatory pressure and exited several exchanges, impacting its market share, which fell from a peak of 66 per cent in February to an annual low of 44 per cent in September.
Other exchanges such as HTX (formerly Huobi), Upbit and Bybit saw gains, while Kucoin was pushed out of the top 10.
Conclusion
CoinGecko’s report on the cryptocurrency industry for 2023 Q3 provides valuable insights into the cryptocurrency landscape during this period. In particular, stablecoins, a cornerstone of the cryptocurrency market, experienced changes in market dynamics.
Tether remained stable, while the other major stablecoins fluctuated. The increase in tokenised T-bills and the decrease in NFT trading volume indicate the evolving nature of the cryptocurrency sector.
In addition, changes in spot trading volumes on centralised and decentralised exchanges show the impact of regulatory developments and market competition.
The cryptocurrency market is constantly evolving and it is essential for market participants and enthusiasts to keep abreast of these changes.
CoinGecko’s comprehensive report provides a detailed snapshot of the industry’s performance in Q3 2023, highlighting the key trends and developments that have shaped the market during this period.
