The cryptocurrency market continues to rise after significant gains in 2023, pending the approval of the first Bitcoin Spot ETF in US history. Bitcoin returned to trading above $47,000 for the first time since 2021, when BTC hit its all-time high of $69,000 in the middle of a bull market.
Greater adoption and institutional acceptance should boost liquidity and benefit prices. This expectation could be realized as early as December 2023, when the cryptocurrency market saw a 15% increase in total capitalization, reaching over $1.6 billion.
As the leading cryptocurrency continues to breach resistance levels, market watchers are keeping a close eye on the impending Bitcoin halving. Bitcoin’s halving, which is expected to take place in about 100 days, will further limit the supply of new coins in circulation, potentially increasing the value of existing holdings.
“Several factors contribute to an optimistic view for 2024, from greater adoption by society to greater institutional interest, the movement to lower interest rates in several countries and exclusive events in the crypto universe. In this context, it is important to highlight that Binance remains committed to providing the best user experience and offering products and services that add more value to your cryptocurrency investments, in addition to maintaining robust security and regulatory compliance efforts to to increase our security. more than 170 million users around the world”said Guilherme Nazar, Managing Director of Binance in Brazil.
All eyes on Bitcoin ETF approval
The possible green light for a Bitcoin ETF in the United States is seen as a major milestone in the integration of digital assets into traditional financial markets. If approved, this ETF could pave the way for institutional investors to participate in the cryptocurrency market in a more traditional and accessible way.
Proponents highlight the potential for greater adoption and a safer investment option for institutional investors, while critics express concerns about market volatility and associated risks.
Recently, Binance released a report with the most important trends to watch during this bullish period, namely:
Positive availability of stablecoins
Recent data shows that the net quarterly change in supply of the top five stablecoins (as measured by market capitalization) turned positive for the first time since the first quarter of 2022.
This indicates the amount of capital that is ready and available to invest in crypto assets at a given time. An increase in the supply of stablecoins often signals capital flows into crypto, providing an indication of potential buying pressure. The recent change can be seen as a positive sign.
Rising NFT volumes
NFT volumes can be considered one of the most important indicators of market sentiment as NFTs can be considered higher beta plays within crypto. NFT volumes broke an eight-month downward trend and rose nearly 200% in November.
Bitcoin was the most popular network, with NFT volume exceeding $375 million, even surpassing Ethereum NFTs ($348 million).
The fact that NFT volumes have broken their downward trend and increased significantly month-on-month is indicative of positive market sentiment and a revitalization of NFT speculation after months of low prices and pessimism for the subsector.
Protocol costs increased
Costs for the top 20 crypto projects rose in November and were approximately 84% higher than in October, and more than 100% higher than in September.
DeFi TVL also rose, while DeFi dominance rose 18% this month. This is a good indicator to monitor as the industry continues to evolve and the protocols are on their way to generating revenue.
In terms of cumulative fees, Ethereum has generated more than twice as much as any other individual protocol, with total fees exceeding $2 billion year to date. The second highest, Tron, generated about $880 million.
The return of DeFi
After many months of relatively limited movement in DeFi (or decentralized finance), we are starting to see some activity return to the sector. Total value locked (“TVL”) in DeFi has increased by almost 25% since the start of the year, with 14% month-over-month growth in November.
With TVL capped at between $45 billion and $50 billion since December last year, it will be important to keep an eye on whether this latest move can be sustained and easily reach the $50 billion mark in the coming weeks and months can exceed.
Bitcoin, Bitcoin, Bitcoin
Bitcoin has had a busy year with Ordinals and BRC-20s, and saw a resurgence of interest in November. News of a Bitcoin ETF in sight seems positive, with the market expecting approval in January, while the Bitcoin Halving in April is another important milestone to keep an eye on.
As a result, Bitcoin’s market cap rose 162% in 2023, surpassing much of the market and most other major crypto assets.
And the ordinal numbers and inscriptions continue to grow. One of the most important developments for Bitcoin in 2023 was the arrival of ordinal numbers and inscriptions. Casey Rodarmor’s ‘Ordinal Theory’ made it possible to track individual Satoshi (the smallest unit of Bitcoin) and assign a unique identification to each of them.
These individual Satoshi can then be ‘inscribed’ with arbitrary content such as text, images, videos, etc. This created an “Inscription” or what quickly became known as a Bitcoin NFT. For a more complete understanding, read our report ‘A New Era for Bitcoin?’ consult.
Alternative Layer-1s are increasing.
A number of alternative Layer-1s (“L1s”) have outperformed Ethereum recently, with Solana and Toncoin making notable strides.
The rise of SocialFi.
SocialFi was born with new protocols like friend.tech, in addition to upgrades from Farcaster, Lens and Binance Square. SocialFi applications have long been touted as suitable potential partners for blockchain and crypto-based technology. 2023 saw a product-driven rise in this subsector of the crypto economy.
RWAs enter the system
RWAs (real-world assets, in translation) have become increasingly important and now represent more than 49% of assets on MakerDAO’s balance sheet. Chainlink also hopes to bring closer ties between TradFi, RWAs and crypto with its new CCIP solution.
Everything ZK
Zero-knowledge (“zk” or “ZK”) technology is starting to take off, with several recent ZK rollup releases and more work and discussion around ZK coprocessors.
Will interest rates fall?
Interest rates in the US are at a 22-year high and the market expects cuts next year. China has already started cutting some interest rates, while lower inflation in Europe has led investors to anticipate cuts by the European Central Bank.
About Binance
Binance is the largest global infrastructure provider for the blockchain and cryptocurrency ecosystem, with a suite of financial products that includes the largest digital asset exchange by transaction volume.
Trusted by millions of people around the world, the Binance platform is committed to increasing users’ financial freedom. It has an unparalleled portfolio of cryptocurrency products and offerings, including finance, education, data and research, social good, investments and incubators, decentralization and infrastructure. solutions, among others.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
