The market cap of cryptocurrencies has grown by 44.5% within Q2, according to the first quarterly report by CoinGecko.
In addition to this, Bitcoin’s price gained over 78%, making a comeback from the March bloodbath of Black Thursday. However, the activity in spot trading has gone down by 55%, contrary to expectations.
“Bitcoin’s average monthly price is now up 78% from the March bottom. It took roughly 48 days for the markets to recover from the vertical drop of the Black Thursday, the day when Bitcoin fell vertically by 35% (over USD 3000) in 24 hours.”
The report, published on July 3, marks the first in a series of three scheduled releases. As the world emerges from lockdowns, markets surged throughout Q2. Going by the stats, the trend appears to have been replicated in crypto markets hence debunking the notion that crypto markets are not correlated to traditional asset prices.
Crypto Market Bounceback
Though highly volatile, the digital asset ecosystem may have passed a resilience test, given the economic effects of COVID-19. The crypto market bounced back from the March lows and now seems to have consolidated in what most stakeholders consider a stable position.
Currently, the total market cap of crypto stands at $268 billion, with Bitcoin dominating this portfolio at 63%.
Looking back at the onset of Q2, things were more uncertain, although crypto maximalists have always been optimistic about mainstream adoption, especially with COVID-19 now at our doorsteps. Well, an increase of 44.5% could probably mean that some of the underlying factors have triggered a shift to crypto assets.
Nonetheless, trading activity has been down as crypto hotheads shift focus to DeFi. CoinGecko also noted that the reduced spot trading is likely attributable to more people HODLing and diminished market confidence after Black Thursday. The report reads:
“This may also simply be a result of investors HODL-ing, having no confidence to trade, or perhaps a market shift towards DeFi and Derivatives trading.”
The shift in liquidity towards DeFi networks has significantly boosted ETH, as it topped gains compared to BTC and Tether. The DeFi market is on its way to hitting $2 billion in total locked value, making the ETH prospects even better. While this is the case, the USDT is the most popular trading pair in both spot and derivative markets. A sign that stablecoins have also found a niche in this volatile ecosystem.