Q4 Dominates 70% of Market Gains, Adds $607B to Total Market Cap, 2023 Annual Crypto Industry Report Shows

1. Total Crypto Market Capitalization Rose +108.1% in 2023, From $829B to $1.72T

The total crypto market cap climbed by +108.1% in 2023, or $869.0 billion in absolute terms.

As for trading volume, it climbed throughout the year, with 2023 Q4 average daily trading volume at $75.1 billion, a +91.9% QoQ increase. Overall daily trading volume stood at $58.9 billion, which is still -31.6% below 2022 figures.

Notable moves within the top 30 cryptos in 2023 Q4 include Solana (SOL) climbing from #7 to #5, and Avalanche (AVAX) from #22 to #9. Solana managed to climb thirteen places in 2023 alone, having started the year in the #18 spot. New entrants to the top 30 include Internet Computer (ICP) at #16, Near Protocol (NEAR) at #23, Optimism (OP) at #26, and Injective Protocol (INJ) at #30. Hedera (HBAR), Binance USD (BUSD), Monero (XMR), and True USD (TUSD) slipped out.

2. Bitcoin Grew +155.2% in 2023, With Growing Confidence in an ETF Approval

Bitcoin (BTC) climbed significantly by +155.2% in 2023. In 2023 Q4 alone, BTC rose +64.3%, from $26,918 to $42,220. During this period, BTC hit a yearly high of $44,004, levels not seen since April 2022.

BTC had a strong first leg up in Q1, rising +72.4%, followed by another spike in Q2. It then pulled back in Q3, dropping -11.5%, before rallying in Q4. Similarly, the average trading volume of BTC dropped off around the end of Q1 and gradually declined in Q2 and Q3. It then picked up in Q4 to $18.0 billion, a gain of +64.3% QoQ.

3. Ethereum Rose +90.5% in 2023, Though Outpaced by Bitcoin

Ethereum (ETH) closed 2023 at $2,294, representing a gain of +90.5% in the year. ETH had its highest returns in 2023 Q1, rising +49.8% from $1,196 to $1,792. It then consolidated for the most part in Q2, and Q3 before rallying +36.4% in Q4. ETH hit a yearly high of $2,376 in December.

Despite the implementation of the Shanghai Upgrade in April, which allowed the withdrawal of staked ETH, there were no significant price movements during that period. Average daily trading volume stayed relatively flat in 2023, except in Q4, where it picked up from $7.2 billion to $14.4 billion, a gain of +100.0%.

4. Solana Recorded a Meteoric Rise of +917.3% in 2023, With a Resurgence in Bullish Narratives

Solana (SOL) climbed +917.3% in 2023, from $10.0 to $101.3. SOL had its first leg up in 2023 Q1, climbing +112.9%. Price action of SOL in Q2 and Q3 was mostly muted, with the FTX bankruptcy estate selling its holdings. It then experienced an aggressive rally in Q4, hitting a high of $121.5.

Average daily trading volume also spiked in 2023, averaging $827.0 million in Q1, before spiking to $2.0 billion in Q4. Solana has seen a resurgence in bullish narratives, such as OPOS (“Only Possible on Solana”), its revival and resilience after FTX’s collapse, and numerous high-profile airdrops such as Pyth Network (PYTH), and Jito (JTO).

5. NFT Trading Volume Stood at $11.8b in 2023, 44% of 2022’s Figures

NFT trading volumes across the top 10 chains amounted to $11.8 billion in 2023. However, this figure is still less than half of the NFT trading volume in 2022, which stood at $26.3 billion.

Trading volume in 2023 Q1 stood at $4.5 billion, but it fell dramatically in Q2 and Q3, where figures stood at $2.7 billion and $1.4 billion, respectively. It then rebounded to $3.2 billion in Q4, thanks in part to strong Bitcoin Ordinals trading volume.

Ethereum continued to be the dominant NFT chain in 2023, capturing 72.3% of trading volume. However, this is a far cry from the 90% dominance it held in 2022. Chains such as Bitcoin and Solana were on the come up, particularly in 2023 Q4. Bitcoin surpassed Ethereum in trading volume in December, with $808.0 million in trading volume. This can be attributed to the introduction of Ordinals earlier in the year.

6. Crypto trading volume hit $10.3 trillion 2023 Q4, rising +53.1%

Crypto recorded $36.6 trillion in trading volume in 2023. In 2023 Q4, volume increased from $6.7 trillion in Q3 to $10.3 trillion, a gain of +53.1%. This marked the first quarter-on-quarter growth of the year, attributed to market sentiment swinging bullish in anticipation of Bitcoin ETFs.

Centralized exchanges (CEX’s) dominated trading volume despite the fall of FTX in 2022, and Binance’s regulatory hurdles throughout 2023. CEX : DEX spot ratio stood at 91.4%, while CEX : DEX derivatives ratio was 98.1%.

In conclusion, the fourth quarter of 2023 witnessed a remarkable transformation in the crypto market, fueled by the anticipation of US spot Bitcoin ETFs. This period not only saw the total market cap surge from $1.1 trillion to $1.6 trillion, marking a substantial 55% increase, but it also reflected a resurgence in Bitcoin's price from $27,000 to $42,000.

The entire year of 2023 showcased significant growth, with the total market cap more than doubling from $832 billion at the year's commencement. However, the main question remains: will 2024 lead the same route? And the answer remains: only time can tell.