In response to a brand new report printed by cryptocurrency information aggregator CoinGecko, a number of attention-grabbing anomalies surfaced in cryptocurrency markets through the third quarter. Though the digital asset trade witnessed heavy sell-offs earlier this 12 months, its total market cap elevated by round $100 billion in comparison with Q2.
Whereas previously, crypto bear markets have largely decoupled from inventory efficiency, cash and tokens traded nearly in precise tandem with the U.S. S&P 500 Index in Q3. The correlation coefficient, which ranges between 0 and 1, for the efficiency of the S&P 500 versus cryptocurrencies stood at 0.85 within the stated time interval.
Moreover, although Bitcoin’s worth noticed a 1% drop throughout Q3, it really outperformed each single asset class other than the U.S. greenback Index, which measures the change price of a basket of foreign currency in comparison with the U.S. greenback. Throughout instances of financial uncertainty, traders worldwide sometimes flood to safe-haven property such because the U.S. greenback and the Swiss franc. Nevertheless, stablecoins, that are largely pegged to the U.S. greenback, noticed their circulation plummet by $4.7 billion in Q3.
One issue behind the plunge seems to be that of the OFAC’s sanction on cryptocurrency mixer Twister Money which made it a felony offense for U.S.-based stablecoin issuers and customers to work together with the service.
Thirdly, whole market capitalization in decentralized finance, or DeFi, functions elevated by 31.3% quarter-over-quarter to $24.5 billion. There was a system-wide rebound throughout all verticals besides within the realm of asset administration. This didn’t come as a shock, as a couple of months prior, the implosion of centralized finance companies interacting with DeFi functions, resembling Celsius and Three Arrows Capital, ignited a widespread bear market.
Lastly, the whole buying and selling quantity of nonfungible tokens, or NFTs, noticed a 77.4% quarterly plunge from Q2 to Q3. On the identical time, the variety of wallets that ever owned an NFT elevated by a staggering 1 million in Q3. Some within the crypto group have lately began to name the underside of the market turmoil.
