Q3 2022 saw some odd anomalies in the crypto market. Despite huge sell-offs of assets, the total capitalization of projects has grown; despite a significant drop in trading volume, the number of holders has increased noticeably, and so on.
CoinGecko, one of the largest crypto data aggregators, presented a report on the cryptocurrency market in Q3 of this year. The report shows several contradictory conclusions:
- The total cap for the period increased by $100 billion compared to the previous quarter. Thus, active sales of many crypto-assets were observed during the three reporting months.
- The total NFT trading volume fell 77.4% compared to Q2. However, the number of holders of non-fungible tokens grew by more than 1 million addresses during the same period. This is doubly odd given that trading volume has fallen 98% since the beginning of the year and over 99% from its peak in April.
- Amid the overall decline, the DeFi market cap grew by 31.3% quarter-over-quarter to $24.5 billion. A recent study by Kaiko pointed to the same thing.
- The U.S. dollar became the most attractive financial asset in Q3. This is evidenced by its index — the average exchange rate of a foreign currency basket against the dollar. Yet, the turnover of stablecoins, which are mostly tied to the dollar, fell $4.7 billion in Q3.
Aside from contradictory data, the report’s authors also emphasized other highlights of Q3. For instance, BTC ranked second in investment attractiveness right after the U.S. dollar, outperforming all other asset classes. This data correlates with the opinion expressed by Mike McGlone from Bloomberg, who pointed out that in a bear market, Bitcoin’s volatility is lower than that of stock indexes and commodity assets.
The correlation between cryptocurrencies and stock indexes decreased slightly. So, the correlation of crypto-assets with the S&P 500 Index fell from 0.92 to 0.85 in Q3 compared to the previous period. Nevertheless, this information differs somewhat from the data of other researchers, who noted the growing correlation of BTC with tech companies’ stocks.
