Crypto Market Capitalization Surged 108% Despite Trading Volumes Plunging 31.6%: CoinGecko

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The crypto market recorded massive growth in several areas wiping out losses of the bear market with its market capitalization going up 108% to approximately $869 billion.

A new market report released by CoinGecko shows industry performances across different quarters highlighting key metrics that led to a rise in various cryptocurrencies and the decentralized finance (DeFi) ecosystem.

CoinGecko 2023 Annual Crypto Industry Report is now LIVE

The crypto market witnessed substantial growth in 2023, doubling its total market cap by $832B, driven by #Bitcoin's impressive resurgence.

Here are 6 key highlights you shouldn't miss! pic.twitter.com/Ve7tLMCigD

— CoinGecko (@coingecko) January 17, 2024

According to the report, the institutional inflow on the anticipation of a spot Bitcoin (BTC) ETF approval by the United States Securities and Exchange Commission (SEC) sent assets into a frenzy with bulls looking on to an uphill climb.

Q4 saw the market cap surge to $1.6 trillion surging 55% from $1.1 trillion with its price also making a sharp increase while the whole crypto market cap increased by 108% in the last 12 months.

Trading volumes on the other hand remained in the red zone compared to the previous year as it plugged 31.6% at $58.9 billion due to the earlier months in the doldrums and regulatory issues.

Last year, global authorities heightened scrutiny on centralized exchanges to prevent a repeat of the FTX case leading to several regulations and lawsuits in various jurisdictions.

In the United States, the SEC and the Commodity Futures Trading Commission (CFTC) filed charges against Binance and other exchanges citing offering services to unregistered securities and improper registrations.

These events in their entirety weakened investor confidence and plummeted spot exchange volume with Binance posting a consecutive decline for many months before a rebound.

However, Q4 saw a 91% quarter-to-quarter (QoQ) rise with $75.1 billion in trading volume trickling into rising DeFi numbers as Assets Under Management (AUM) and Total Value Locked (TVL) spiked.

Bitcoin shapes the yearly narrative

Although the wider market ended in the green zone, the performance of Bitcoin led to institutional investors coming into the market with a renewed appetite for cryptocurrency products.

Per the report, Bitcoin grew 155% to hit a yearly high of $44,004 in Q4, a price not recorded since April 2022. The asset spiked 72% in Q1 setting the tone for the rest of the year while its hashrate rose 103% in 2023.

“The market then cooled off in Q3, before rallying strongly in Q4 on the back of anticipation for spot Bitcoin ETF approvals, and expected interest rate cuts by the Feds.”

Bitcoin’s dominance can be seen in a 9.2% market share rise to 47.8% while Ethereum and USDT  lost 1.5% and 2.7% to hold 15.9% and 5.3% of the market respectively.

Aside from the positives, bad actors stole $2 billion in about 463 exploits leading to wider concerns and regulatory scrutiny on the safety of investor assets.

The largest incident was the $231 million Multichain bridge hack in July while others that attracted attention were Mixin’s $142 million, Poloniex $123 million, and Atomic Wallet $115 million.

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