Exploring crypto trends: A look back at 2023 and insights for 2024 by Binance Research

Binance Research, the analytical powerhouse of Binance dedicated to providing top-notch insights for cryptocurrency investors, has unveiled its comprehensive report titled “Full-Year 2023 & Themes for 2024” on the crypto industry’s performance in 2023 and the anticipated trends for 2024.

The crypto market witnessed a remarkable turnaround in 2023, marked by a 109% increase in market capitalization. This surge, driven by gains in Q1 and Q4, was fueled by optimism around Bitcoin ETF approvals and the anticipation of Bitcoin’s upcoming halving. A favorable global economic environment, characterized by robust GDP growth and moderate inflation rates, also played a role in creating a conducive atmosphere for cryptocurrency investments.

Web3 projects gained significant attention throughout the year, attracting 1173 investments totaling US$9.0B. Infrastructure projects led the way with a substantial 36.5% of the investments, followed by CeFi (13.3%) and DeFi (8.6%). Despite a reduction in investment volume and valuations, positive signs of market recovery and increased capital allocation towards infrastructure development were evident.

On-chain metrics revealed a resurgence in gaming activity towards the end of the year, with 12.6M weekly unique active wallets, more than double the count at the beginning of the year. The NFT market bounced back impressively in Q4, with December’s volumes reaching US$1.7B, driven by the notable growth of Bitcoin NFTs. The report highlighted the NFT marketplace competition, with the upcoming Blur-aligned L2, Blast, posing an interesting development.

Decentralized Finance (DeFi) experienced robust growth, with Total Value Locked (TVL) rising by 38.9% YoY. Liquid staking tokens (LSTs) and LSTfi, along with the adoption of real-world assets and intent-centric architecture, contributed to the sector’s growth.

Despite a rebound in October 2023, the global stablecoin market capitalization saw a 5.2% decline YTD, with centralized stablecoins maintaining a 92% market share. Tether’s USDT increased its dominance to 70.6%, despite the emergence of new entrants like Collateralized Debt Position (CDP) and LST-backed stablecoins.

Binance Research, drawing from its expert analysis, outlined eight anticipated themes for the 2024 crypto landscape. These themes include developments related to the Bitcoin ecosystem, the ownership economy, artificial intelligence (AI), real-world assets (RWAs), on-chain liquidity, institutional adoption, and more.

In their report, the Binance Research team emphasized the industry’s ability to adapt, innovate, and grow, as evidenced by the strong recovery in 2023. They foresee this recovery as the foundation for further breakthroughs, growth, and possibilities in the crypto space.

Binance Research continues to be a valuable resource for both newcomers and seasoned insiders, providing detailed industry insights and thematic crypto narratives. This year-end report reflects Binance Research’s commitment to making crypto accessible by offering a thorough analysis of the crypto landscape.

Below are the key takeaways from the report:

• Market capitalization increased by 109% in 2023, fueled by substantial gains in Q1 and Q4. The surge in the final quarter was driven by optimism around Bitcoin ETF approvals and anticipation of Bitcoin’s upcoming halving. The broader financial environment, marked by resilient global GDP growth and moderated inflation rates, also contributed to a conducive environment for risk assets such as cryptocurrencies.
• Throughout 2023, Web3 projects attracted a total of 1173 investments, amassing a collective capital of US$9.0B. Of this, a substantial 36.5% was invested in infrastructure projects, followed by CeFi’s 13.3% and DeFi’s 8.6%. Despite the noticeable reduction in both investment volume and overall valuations in 2023, there are positive indicators including the signs of market recovery and substantial capital being allocated towards building infrastructure.
• Looking at on-chain metrics, there has been a resurgence in gaming activity going into the year-end. There were 12.6M weekly unique active wallets in the final week of the year, more than double the start of the year at 5.8M. 2024 is looking set to be an eventful year with the upcoming launches of several games by notable gaming giants.
• Non-Fungible Tokens (NFTs) rebounded impressively across Q4. December’s volume of US$1.7B was the highest of 2023, with Bitcoin NFTs showing the most impressive growth. The NFT marketplace wars have been another key theme, with the upcoming Blur-aligned L2, Blast, an interesting upcoming development. It will be important to see OpenSea’s continued response to their dwindling market share numbers. 
• Decentralized Finance (DeFi) saw robust growth in 2023 with TVL rising 38.9% year-on-year (YoY). The remarkable ascent of liquid staking tokens (LSTs) and LSTfi, the rising adoption of real-world assets, and the emergence of intent-centric architecture are notable developments that have contributed to the growth of the sector.
• Despite a rebound in October 2023, the global stablecoin market capitalization saw a 5.2% decline YTD, accompanied by shifts in market dynamics. Centralized stablecoins continue to command 92% of the market, with Tether’s USDT increasing its dominance to 70.6%, even as new entrants such as Collateralized Debt Position (CDP) and LST-backed stablecoins emerged.

Founded in 2017 by Changpeng Zhao and Yi He, Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider, offering a wide range of crypto products and services, including the largest digital asset exchange by volume. With a commitment to increasing financial freedom for users worldwide, Binance’s platform includes trading and finance, education, data and research, social good, decentralization and infrastructure solutions, and more.

Binance Research, the research arm of Binance, has established itself as a key player in the crypto research space since its launch in December 2018. Providing institutional-grade analysis, in-depth insights, and unbiased data, Binance Research regularly publishes thought pieces covering various topics within the crypto ecosystem, blockchain technologies, and the latest market themes.