Crypto Industry in Good Health According to Binance’s Mid-Year Report

Jack R. Mitchell

Binance Releases Half-Year Crypto Industry Report: Key Insights and Trends

Binance Research

Binance, the world’s leading cryptocurrency exchange, has published its 120-page half-year report on the state of the crypto industry. The report covers the major sectors of the industry, such as Bitcoin and layer-1s; layer-2s; stablecoins; DeFi; and NFTs. It also explores gaming, metaverse, funding, and institutional adoption.

To access the full report, click here.

The report provides a comprehensive analysis of the adoption, usage, and innovation in each sector. It shows that the industry is in a strong position, with solid foundations for growth in the second half of the year and beyond.

Some of the main findings include:

  • The total market capitalization of the industry increased by 30% year-on-year, reaching $1.17T at the end of June
    Bitcoin’s market dominance rose to its highest level since April 2021, while its correlation with traditional finance reached a three-year low
    USDT gained 26% market share YtD, despite a 7% drop in the global stablecoin market value
    Liquid staking emerged as the largest DeFi sector

The report reveals some interesting metrics that may not be obvious to casual observers, but indicate positive trends for the industry. For example, Bitcoin’s trading volume surged by 185% YtD, while its network transactions grew by 58% and average tx fees by 143%. This increase in network activity is partly due to the development of Ordinals that enable NFT creation and trading on Bitcoin.

Importantly, the security of the Bitcoin network also improved, with hashrate rising by 40% YtD and mining difficulty following suit with a 43% increase. The report also uses data from other sources such as sentiment analysis. The Bitcoin Fear & Greed Index doubled since January, reflecting higher trader confidence.

Among the other L1s analyzed in the report, Solana had the strongest growth in market capitalization in the first half of the year. BNB Chain outperformed Ethereum in terms of YtD network performance, with a 113% increase in daily tx and a 118% increase in active addresses. The report also highlights the progress made by Avalanche on subnets and Cosmos on shared security models.

One of the biggest stories of the year is the rise of liquid staking and LSTfi (the combination of liquid staking tokens and DeFi), which saw a massive 460% increase in total value locked since April. Binance’s H1 report also examines the L2 sector in depth, with the development of zkEVMs and Polygon’s upcoming transition to Polygon 2.0 being notable events. The report also discusses emerging sectors such as L3s: app-specific chains that connect to existing layer-2s.

The report also reviews the market dynamics of the leading stablecoins and their emerging competitors that have gained market share in 2023. These include USDD, crvUSD, GHO and LUSD, with LUSD’s market cap growing by 54% YtD.

The report concludes on a bullish note, stating: “The market has largely benefited from the “Bitcoin ETF” season, driving the market’s newfound momentum as Bitcoin soared to new highs for the year, helping boost investor confidence. As we embark on the second half of the year, we look forward to seeing further innovations, greater adoption, and an even brighter future.”

The crypto industry has shown impressive growth across almost every sector in H1. In DeFi, users increased by 43% YtD and NFT volumes also rose compared to H2 2022, despite lower floor prices. In terms of funding, Binance reports that the top 10 funds raised a total of $3.6 billion in H1. There is also ample evidence of institutional adoption, such as significant trials involving CBDCs, enterprise blockchain projects, and real-world assets on-chain.

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