2023 Q3 Crypto Industry Report

A significant market downturn in mid-August split the relatively slow Q3 into two parts. With limited liquidity on cryptocurrency exchanges, Bitcoin’s (BTC) value plummeted from around $29,000 to approximately $26,000 within a single day on August 17, causing the total cryptocurrency market capitalization to drop from $1.2 trillion to $1.1 trillion.

Despite the absence of any major market-related news on that particular day, it appeared as if traders were winding down their activities for the remainder of the summer. Trading volumes on centralized exchanges have declined by 20.2% in the third quarter compared to the second quarter. Despite it being a pretty eventful three months, the crypto market was absent of any momentum.

Our comprehensive 2023 Q3 Crypto Industry Report covers everything from the crypto market landscape to analyzing Bitcoin and Ethereum, deep diving into the decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, and reviewing how centralized exchanges (CEX) and decentralized exchanges (DEX) have performed.

We’ve summarized the key highlights, but be sure to dig into the full 49 slides below.

Top 6 Highlights of CoinGecko’s 2023 Q3 Crypto Industry Report

1. Total crypto market capitalization declined 10% in 2023 Q3, but is still up 35% year-to-date

2. Stablecoins shrank 3.8%, with TrueUSD being the only gainer in the top 5

3. Tokenized T-bills have been the largest driver of on-chain RWA assets in 2023, totaling $665 million

4. NFT trading volume dropped 55.6%, with dwindling interest across chains

5. Spot trading volume on centralized exchanges fell 20.1%, with Binance’s market share dropping to 44%

6. Spot trading volume on decentralized exchanges fell 31.2%, with Sushi losing its spot in the top 10

1. Total crypto market capitalization declined 10% in 2023 Q3, but is still up 35% year-to-date

The total crypto market cap saw a decline of almost -10% in 2023 Q3, or $119.1 billion in absolute terms. Since the local top on April 17, total crypto market cap has declined by -16.3%. As for trading volume, it has slowly continued to decline after plummeting in late March. Average daily trading volume in 2023 Q3 sat at $39.1 billion, a decline of 11.5% compared to Q2.

Within the top 30, notable moves include Solana (SOL) climbing from #10 to #7, and TrueUSD (TUSD) from #23 to #19. Meanwhile, Litecoin (LTC) fell from #9 to #14, Avalanche (AVAX) dropped from #15 to #22, and Binance USD (BUSD) slid further from #18 to #27 as Binance announced support for the stablecoin will be phased out by February 2024.

In the third quarter, Hedera (HBAR) and Filecoin (FIL) made their way into the top 30, securing positions at #29 and #30, respectively. On the other hand, Lido (LDO) and Internet Computer (ICP) slipped out of the top 30 rankings.

2. Stablecoins shrank 3.8%, with TrueUSD being the only gainer in the top 5

The top 15 stablecoins fell -3.8% or $4.8 billion in market cap in 2023 Q3 and now sits at $121.3 billion. Tether’s (USDT) market cap remained flat in 2023 Q3; however it saw a 2.6% gain in stablecoin market share. USD Coin (USDC) saw the largest absolute losses at -$2.26 billion (-8.3%), while Binance USD (BUSD) saw the largest percentage decline of -45.3%, with a drop of -$1.87 billion.

TrueUSD (TUSD) was the only gainer within the top 5, with a $0.39B (+12.8%)  increase in market cap. Outside the top 5, notable new entrants include First Digital USD (FDUSD) (+55.8% or $0.15B), crvUSD (CRVUSD) (+1.8% or $2.2M) and PayPal’s PYUSD (+113.2% or $50.1M) at #9, #13, and #15 respectively; all were launched some time within Q3. Meanwhile, Frax (FRAX) (-33.2% or $0.33B), Paxos (USDP) (-50.7% or $0.50B), and Gemini Dollar (GUSD) (-46.8% or $0.27B) saw the largest losses.

3. Tokenized T-bills have been the largest driver of on-chain RWA assets in 2023, totalling $665 million

The Real World Asset (RWA) sector continued to grow in 2023. In particular, tokenized US treasury bills have surged in popularity, with its market cap increasing from $114.0 million in January 2023, to $665.0 million by the end of September, a 5.84x gain.

With traditional financial institutions leading the charge this year, the number of projects offering T-bill tokens has tripled. Franklin Templeton controls 46.6% of the total market share, followed by Ondo Finance’s 26.8% ($178.3 million) market share as at the end of September. Launched in 2021, Ondo Finance pivoted into RWAs in February 2023. Newer protocols have started to gain traction as well, with Backed Finance and OpenEden ending September with a 7.11% and 1.73% market share, respectively.

The majority of RWA protocols are based on Ethereum, which has a 49% share of the market cap. Stellar, which is Franklin Templeton and Wisdomtree’s preferred network, follows closely behind with 48% market share.

4. NFT trading volume dropped 55.6%, with dwindling interest across chains

NFT trading volumes declined by 55.6%, from $3.67 billion in 2023 Q2 to $1.63 billion in 2023 Q3.

Despite trading volume dwindling, Ethereum maintained its dominance of 83.2% of the NFT market in Q3. Meanwhile, Bitcoin managed to capture 5.6% of market share during the same period. Its dominance has since dwindled from its peak in May, and only slightly rebounded in September.

In contrast, ImmutableX NFTs have had a strong Q3, with monthly trading volume averaging above $20 million. Its market share increased from 2.1% in Q2, to 3.9% in Q3. This can be attributed to the trading card game Gods Unchained, which launched on the Epic Games Store in June and had its in-game marketplace roll-out in August.

5. Spot trading volume on centralized exchanges fell 20.1%, with Binance’s market share dropping to 44%

Spot trading volume across the top 10 centralized crypto exchanges (CEX) totaled $1.12 trillion for 2023 Q3, representing a -20.1% decrease from Q2. It has been a turbulent quarter for crypto exchanges.

In particular, Binance has come under increasing pressure from regulators, and has exited multiple markets, along with some of its top executives leaving. This has impacted its market share, which dropped to a yearly-low of 44% in September, down from its yearly-high of 66% in February.

HTX (which rebranded from Huobi), regained its spot in the top 10, placing third and ending September with 8% market share. It chalked $35.3 billion in trading volume in Q3, a gain of 86.9%. Upbit and Bybit were the only other gainers, with 4.6% and 6.9% respectively. Meanwhile, Kucoin has since been edged out of the top 10.

6. Spot trading volume on decentralized exchanges fell 31.2%, with Sushi losing its spot in the top 10

Spot trading volume across the top 10 decentralized exchanges (DEX) totaled $105 billion in 2023 Q3, representing a -31.2% drop from Q2.

THORchain was the largest gainer in 2023 Q3, with volume climbing 113% or $1.27 billion. However, this surge in volume could be partially attributed to illicit transfers through the network. Prominent users include the FTX hacker, and the North Korean Lazarus group. THORChain ended September with a 3% market share.

Sushi, which has been a mainstay of DEXs since its launch in 2020, dropped out of the top 10 in 2023 Q3. Instead, Orca has taken its spot with a 1% market share at the end of September.

Read the Report: CoinGecko’s 2023 Q3 Crypto Industry Report

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