As someone who has been closely monitoring the crypto market for the past few years, I must say that the Q3 report from CoinGecko paints a fascinating picture of the current state of the industry. The sharp decline in NFT trading volume, especially on Ethereum, is a stark reminder of how quickly things can change in this fast-moving landscape.
Following Bitcoin‘s halving in Q2, a degree of consistency, whether openly acknowledged or not, was noticeable when compared to past years. However, the third quarter of 2024 introduced fresh challenges due to shifts in global politics and economic conditions.
As a result, the crypto market continues to be a mix of ups and downs.
Despite a relatively stable market, there was hardly any silence as the U.S. Federal Reserve’s actions, China’s economic stimulus, and Japan’s unforeseen maneuvers ensured that the cryptocurrency sector remained bustling with activity.
In our summary of the Q3 2024 CoinGecko Crypto Industry Report, we dissect significant happenings across Bitcoin, Ethereum, DeFi, NFTs, and both centralized and decentralized trading platforms to evaluate their performance.
With the market changing so fast, understanding these trends is critical for anyone involved.
Due to CoinGecko’s report, we were able to implement crucial adjustments in the industry, enabling you to formulate your strategies in anticipation of upcoming trends.
Key Takeaways
- The crypto market dropped by 1% in Q3 2024, closing at $2.33 trillion amid global economic uncertainty and interest rate fluctuations.
- Bitcoin’s market share increased to 53.6% by the end of Q3, reaching its highest dominance since April 2021, despite only a 0.8% gain in its price.
- Stablecoins grew by $11 billion in Q3, with Tether leading the market, holding a 70% share of the $170.2 billion stablecoin market.
- Prediction markets exploded, growing 565.4%, with Polymarket dominating as bets on the U.S. elections fueled trading volumes.
- The NFT market saw a sharp 61.3% decline in Q3, with Ethereum and Bitcoin NFT volumes suffering the most, while Layer 2 networks saw modest activity.
- Spot trading volume across the top 10 centralized exchanges dropped by 14.8%, with Binance’s share falling below 40%, while Crypto.com made significant gains.
1. Crypto Market Dips 1% in Q3 2024 Amid Economic Uncertainty
The cryptocurrency market declined by 1% in the third quarter of 2024, finishing at $2.33 trillion. After hitting a high in July, the market fell in August due to global economic pressures.
In the United States, interest rates stayed the same, but Japan increased theirs. Following fluctuations ranging from $2.00 to $2.20 trillion, the market experienced a slight rebound due to reduced interest rates in the U.S. and economic stimulus measures taken by China.
The average trading volume dropped from Q2 by 3.6% to $88 billion daily.
2. Bitcoin’s Dominance Grows to 53.6%
As a market analyst, I observed an increment of 2.7% in Bitcoin’s (BTC) market dominance during Q3 2024, despite a minor decline in the total crypto market capitalization compared to the previous quarter. This growth in Bitcoin’s share now stands at a robust 53.6%.
Although Bitcoin only saw a slight 0.8% gain, it outperformed other cryptocurrencies like Ethereum (ETH) and BNB, which saw more significant declines in market dominance. This marks the highest level of Bitcoin’s dominance since April 2021.
Among the top seven digital currencies, it was Ethereum that suffered the most significant decrease, amounting to 3.6%. This drop occurred towards the end of Q3, despite the introduction of Ethereum-based ETFs in July. It’s possible that reduced enthusiasm for Ethereum’s ecosystem could have played a role in this decline.
3. Stablecoins Market Cap Grows by $11B
By Q3 2024, the combined market value of the top 20 stablecoins had grown by an impressive $11 billion, ultimately standing at approximately $170.2 billion towards the end of the quarter. This represented a notable growth of 6.9% compared to the previous quarter’s total of $159.3 billion.
Stablecoins like USDT (Tether) and USDC (USD Coin) continue to dominate the market, with USDT accounting for around 70%, while USDC holds approximately 21%. The vast majority of the recent growth in this sector was seen in USDT and USDC, with USDT increasing by $7 billion and USDC adding $3.3 billion.
Conversely, USD-based tokens experienced their initial drop, amounting to $1.1 billion in withdrawals, partly because of a significant decrease in sUSD’s Annual Percentage Yield (APY). On the other hand, PYUSD and GHO recorded impressive gains of 66.5% and 72.5%, respectively. Unfortunately, GUSD (-35.3%) and crvUSD (-47.9%) suffered the biggest losses in market capitalization during Q3.
4. Gold Outperforms Bitcoin, Rising 13.8%
In the third quarter of 2024, Bitcoin experienced a slight price rise of 0.8%, however, most significant investment classes surpassed it. Gold took the lead with a substantial growth of 13.8%, boosted by economic worries within the U.S. and geopolitical tensions in the Middle East.
Similarly, the Japanese Yen showed strength, rising by 12.0%, following the unexpected increase in interest rates by the Bank of Japan. Compared to crude oil and the U.S. Dollar Index (DXY), Bitcoin experienced more weakness due to worries about demand and potential interest rate decreases.
All major fiat currencies strengthened against the dollar.
5. Prediction Markets Surge 565.4%
prediction markets experienced significant expansion, growing an impressive 565.4%, due to heavy betting on the approaching U.S. elections. The leading three platforms collectively amassed a total of $3.1 billion in transactions, marking a substantial increase from $466.3 million during the last quarter.
In a clear and straightforward manner, here’s how you could rephrase that statement: Polymarket held an overwhelming presence in the market, accounting for 99% of all shares, while experiencing a massive surge in trading volumes, increasing by a staggering 713.2%.
Starting from January 2024, a total of $1.7 billion has been placed as bets on the U.S. Presidential Election, which represents approximately 46% of Polymarket’s annual overall volume.
6. Bitcoin Hash Rate Hit a New All-Time High
In Q3 of 2024, Bitcoin’s total computing power (hash rate) experienced a 19.6% surge from its post-halving dip. Starting at 503 million trillion hashes per second (TH/s) in July, it climbed to 602 million TH/s by the end of the quarter. The daily average hash rate peaked at an unprecedented high of 743 million TH/s during early September.
Even with ongoing growth, miners’ profits consistently decreased every month, dropping by 6% in September alone. Notably, Russia has recently legalized cryptocurrency mining, and five significant mining companies have ventured into artificial intelligence (AI) by establishing high-performance computing (HPC) facilities.
7. Ethereum Layer 2 Transactions Up 17.2%
The number of transactions on the leading 10 Ethereum Layer 2 platforms rose by 17.2%, nearly hitting 10 million per day towards the close of September. Conversely, the Ethereum main network handles approximately a million transactions each day.
In this scenario, Base took the lead, managing approximately 42.5% of all Layer 2 transaction activities. Arbitrum came in second place with around 18.9%, while Blast handled about 8.1%.
In August, there was a significant increase in activity for Manta Pacific, largely driven by a well-received on-chain Telegram application known as Taman. However, following its initial release, the amount of traffic decreased.
8. NFT Trading Volume Declined by 61.3%
In the third quarter, there was a significant decline in trading activity on the Non-Fungible Token (NFT) market, with the trading volume dropping by approximately 61.3%. This decrease took the total value from around $3.1 billion in the second quarter to only $1.2 billion in the third quarter.
The trading volume of Ethereum NFTs decreased significantly by 64.7%, reducing Ethereum’s dominance from 45% to 35%. Meanwhile, Bitcoin’s NFT trading saw a decline as well, but its Ordinals activity still represented 25.2% of the total volume, outperforming Solana at 16%.
2-tier blockchains such as Blast and Base have remained active in the Non-Fungible Token (NFT) sector due to renowned collections and games, however, trading volumes significantly dropped, resulting in approximately $3 million worth of transactions during Q3.
Despite the downturn, Layer 2 networks now control 7% of NFT trading volume.
9. Centralized Exchange Spot Trading Volume Drops to $3.05T
According to CoinGecko’s findings, the leading ten centralized cryptocurrency exchanges collectively handled a trading volume of approximately $3.05 trillion during the recent quarter – marking a decline of around 14.8% compared to the preceding three months.
For the first time since January 2022, Binance’s dominance as the top Centralized Cryptocurrency Exchange (CEX) dipped below the 40% mark, ending at 38% in September. Meanwhile, Crypto.com significantly increased its position, climbing from ninth place to a strong second, boosting its trading volume by an impressive 160.8% and securing a 14.4% market share.
Conversely, OKX and Gate.io suffered a significant decrease in trading volumes exceeding 30%. Similarly, Coinbase witnessed a drop of 23.8%, causing it to slip from its sixth position down to tenth in the rankings.
10. Ethereum’s DEX Trading Dominance Slips as Solana and Base Gain Ground
Despite maintaining its position as the primary blockchain for decentralized exchange (DEX) trading, Ethereum saw a decline in its market dominance, with its share falling under 40%. This decrease was due to a near 20% drop in trading volumes, resulting in a total of approximately $130.5 billion.
Solana made significant progress due to the surge in popularity of meme-based cryptocurrencies, amassing a 22% market share and facilitating approximately $21.5 billion worth of transactions.
Base also grew, increasing its market share to 13% with $12.3 billion in volume.
Tron climbed into the top ten positions, propelled by the unveiling of the SunPump meme coin creator, capturing approximately 2% of the market and recording a trading volume of $1.7 billion.
Final Thoughts
It’s evident that the cryptocurrency market underwent substantial transformations during Q3 of 2024, primarily due to global economic fluctuations and key political decisions.
As a crypto investor, I’ve noticed that although there weren’t any major ups and downs, the market has been buzzing with activity. Different factors have been influencing the movements within diverse sectors of the cryptocurrency world.
For anyone invested in or following the crypto industry, staying informed will be key to navigating its complexities in the coming months. So, until the next CoinGecko report, take advantage of the above information and good luck.
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2024-10-18 17:55