Binance Research: Key Trends in Cryptocurrencies – May 2024

3 months ago 0

Main points

This blog previews Binance Research’s recent report discussing key developments in the cryptocurrency markets over the past month.

April was a tough month for cryptocurrencies, with the total market capitalization declining by 11.3% as momentum from previous months slowed.

The DeFi and NFT markets also declined, recording a 0.7% decrease in TVL and a 21% decline in monthly trading volume, respectively.

Thanks to Binance Search, you can benefit from industrial-grade insights into the processes that shape Web3. By sharing these insights, we hope to empower our community with the latest insights in cryptocurrency research.

Today’s blog explores key Web3 developments in April 2024 to provide an overview of the current state of the ecosystem. We analyze the performance of the cryptocurrency, DeFi and NFT markets before previewing the major events to watch out for in May 2024.

Cryptocurrency Market Performance in April 2024

April was a difficult month for cryptocurrencies, with the total market capitalization falling by 11.3% as the momentum built up in the previous months shifted to the downside. Some of the major contributors to this reversal include changes in rate cut expectations, geopolitical risks, and a slowdown in bitcoin ETF spot flows.

Nonetheless, positive developments were also recorded during the month. Six different cryptocurrency-based spot ETFs began trading in Hong Kong on April 30 following approval from regulators. Additionally, the total supply of US dollar-pegged stablecoins has reached its highest level in two years. USDT and USDC stablecoin supplies are steadily increasing, indicating sustained capital flows into the cryptocurrency market.

Monthly change in cryptocurrency market capitalization (%)

Source: CoinMarketCap (April 30, 2024)

Monthly price trend of the top 10 coins by market capitalization

Source: CoinMarketCap (April 30, 2024)

Most of the top ten coins by market capitalization closed the month in negative territory. TON and BNB managed to show relative strength with a gain of 1.0% and a slight decline of 1.4% respectively. TON’s improved performance can be attributed to the popularity its ecosystem has gained recently, reaching all-time highs in April in terms of monthly active addresses and total value locked (TVL) in the network. BNB has continued to be one of the best performing stocks in recent months.

ETH and BTC both saw declines of around 8% in April. However, the approval of three BTC spot ETFs and three ETH spot ETFs in Hong Kong marked a positive milestone for the two major cryptocurrencies. XRP and SHIB saw larger price declines, falling 17.1% and 19.2% respectively over the month. DOGE, ADA, SOL and AVAX showed the weakest performance among the leaders, losing around 30% by the end of the month.

Decentralized Finance (DeFi)

In line with broader market trends, April was a quiet month for the DeFi sector, which saw a 0.7% decline in TVL. Among the top ten chains, Merlin Chain, a native Bitcoin layer-2 solution, grew the most with a monthly gain of 1000% and a TVL exceeding $1 billion. As far as protocols go, notable performers include Pendle and Hyperliquid. Pendle’s TVL reached $5 billion and its cumulative trading volume surpassed $15 billion. Hyperliquid’s TVL surpassed $435 million, surpassing Aptos, Near, and Cardano.

TVL share of the main blockchains

Source: DeFiLlama (April 30, 2024)

Non-fungible tokens (NFTs)

Monthly NFT trading volume

Source: CryptoSlam (April 30, 2024)

The NFT market also declined in April, posting a 21% monthly decline in total sales volume to $1.11 billion. Bitcoin collections continued to steal the spotlight, with four of the top five collections in terms of sales volume for the month based on Bitcoin. These collections, namely Ordinals, PUPS, WZRD, and NodeMonkes, collectively recorded sales volume of $423 million. Sentiment towards Ethereum holdings has remained relatively poor.

In terms of NFT sales volumes across major chains, Bitcoin leads with $567 million, followed by Ethereum with $241 million and Solana with $153 million. On a percentage basis, Bitcoin saw a 5% decline in total volume, while Ethereum and Solana saw significant drops near or above 50%. These numbers suggest that collectors have recently shifted their attention towards Bitcoin-based offerings.

Upcoming events

To help users stay up to date on the latest Web3 news, the Binance Research team has summarized notable events and token unlocks for the month ahead. Keep an eye out for these upcoming developments in the blockchain space.

Important events in April 2024

Source: Binance Research

The largest token is unlocked in US dollar terms

Source: Token Breakouts, Binance Research

Binance Search

The Binance Research team is committed to providing objective, independent, and comprehensive analysis of the crypto space. We publish insights on Web3 topics, including but not limited to the crypto ecosystem, blockchain applications, and the latest market developments.

This article is just a snapshot of the full report, which contains further analysis of the most important market charts over the past month. Additionally, it delves into recent developments regarding the Runes protocol, liquid restaging, stablecoin provision, and the TON ecosystem.

Read the full version of this Binance Research report here

Disclaimer: This material is prepared by Binance Research and is not intended to be considered a forecast or investment advice and does not constitute a recommendation, offer or solicitation to buy or sell any security or cryptocurrency or to adopt any investment strategy. The use of terminology and opinions expressed are intended to promote understanding and responsible development of the industry and should not be construed as definitive legal opinions or those of Binance. The opinions expressed are updated as of the date indicated above and are the opinions of the writer; may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources believed to be reliable by Binance Research, are not necessarily all-inclusive, and are not guaranteed as to accuracy. Therefore, no warranty of accuracy or reliability is given, and no liability otherwise arising for errors and omissions (including liability to any person by reason of negligence) is accepted by Binance. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any predictions made will come true. Reliance on the information contained in this material is at the sole discretion of the reader. This material is intended for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell any securities, cryptocurrencies or any investment strategy, nor will any securities or cryptocurrencies be offered or sold to any person in any jurisdiction. in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Investments involve risks.