Our Q3 2020 Quarterly Cryptocurrency Report is here!
Q3 2020 was the quintessential summer for Decentralized Finance (DeFi). Other than the minor dip in mid-September, we have seen a continuous uptrend in the total crypto market cap since the March crash. Bitcoin’s volatility continues to show a strong correlation with the traditional S&P 500 (SPX) index.
In Q3, we also saw several new decentralized exchanges springing up and gaining popularity, fueled by the much-hyped yield farming trend kick-started by Compound in June. Decentralized exchanges continue to grow at a much faster rate than its centralized counterparts and it is a trend that we are observing to see if it will continue in the coming quarters.
There is much to unpack in the CoinGecko Q3 2020 Quarterly Cryptocurrency Report.
Here are some of the main highlights:
Market Capitalization continued to grow in Q3 by 31% (+$75b) amidst September uncertainties.
The price of Bitcoin grew marginally (+8%) this quarter and reached a new peak at $12,272 on August 18th.
Over $9 billion capital inflow in this quarter, propelled by yield farming movement in the DeFi scene.
Uniswap strengthens its dominance of the DEX market from 47% to 63% as DeFi gains popularity.
1. Market Capitalization continued to grow in Q3 by 31% (+$75b) amidst September uncertainties.
In Q3, the crypto markets experienced positive growth of +31% in market capitalization and +34% in trading volume - illustrating market recovery in terms of trading volume as compared to Q2 where March Black Thursday has instilled fear.
However, towards the end of Q3, market uncertainties (COVID-19 and U.S. elections in the upcoming November) reinjected fear into the markets and trimmed Q3 gains - depicting crypto markets struggling to keep pace with the July-August mini bull run.
2. The price of bitcoin grew marginally (+8%) this quarter and reached a new peak at $12,272 on August 18th.
The “Bitcoin is a stablecoin” meme has not been truer this quarter. That being said, we are seeing a record-breaking period for Bitcoin (BTC) since the crypto winter in 2018. This is the first time Bitcoin has stayed above the $10,000 benchmark for a sustained period of time, currently tallying at 65 consecutive days by the end of Q3 and counting.
Q3 also saw the price of Bitcoin reaching a new peak at $12,272 on August 18th, almost reaching the 2019 high of $12,996. Bitcoin price has been up 50% year-to-date. However, the faltering trading volume suggests that investors may be staying on the sidelines due to this year’s ongoing economic uncertainty.
3. Over $9 billion capital inflow in this quarter, propelled by yield farming movement in DeFi scene
Q3 2020 was likely the period of time where capital inflow to the Ethereum (ETH) blockchain is at its largest to-date since inception, likely driven by investors seeking to capitalize on yield-farming opportunities with lucrative returns.
Impressively, over $9 billion flowed into the space in this quarter alone, with Tether (USDT) accounting for nearly two-thirds of the total inflow. Wrapped Bitcoin (WBTC) also grew explosively with nearly $1 billion flowing in, representing a 1766% growth.
Towards the end of Q3, it appears that the capital inflow has slowed down slightly due to reduced yield farming returns, but it is likely to continue as long as returns continue to outperform traditional markets.
4. Uniswap continues to dominate the DEX market by 67% as DeFi took off
In Q3, the DeFi & yield farming hype pushed trading volumes on decentralized exchanges up to new highs. Monthly trading volumes for the top 10 DEX increased from $3.8 billion in July to $30.4 billion in September, a 700% increase.
Throughout this period, Uniswap & Curve both remained as the dominant trading avenues, accounting for 80% of the DEX market share by the end of Q3 2020.
A new contender, Sushiswap (which is a fork of Uniswap), managed to grab up to 8% of market share in September, but it remains to be seen if it can continue to innovate and attract traders and liquidity providers alike.
What’s New At CoinGecko
We at CoinGecko have also experienced a very fruitful summer! We rolled out a couple of much awaited features over here:
You can now take advantage of >7000 cryptocurrencies indexed across 300 crypto exchanges to create your very own portfolio, track profit & losses (P&L) and more. Available on both Web and Mobile App!
We also created a Yield Farming section for our fellow farmers to track over 200 yield farms available out there - providing information on value locked, collateral required, audits available as well as the returns!
Mobile App Widgets
Available on both Android and iOS, our widgets allows users to quickly glance at crypto prices of a single cryptocurrency, top-10 crypto, as well as their portfolio coins. Try our app out today and let us know what you think of it! :)
This is barely a fraction of what we have covered in our report - Grab your own copy of the full report here!
Erina is CoinGecko’s market research analyst. Current expertise is finance and crypto - DeFi. Previously in research consulting and often did market analysis.