Q3 2021 Quarterly Cryptocurrency Report

In Q3 2021, the market capitalization for the top-30 coins has recovered since the $2.5 trillion peak in May 2021, despite increasing regulatory concerns over stablecoins and the wider ecosystem. Nonetheless, there is a silver lining as China’s perpetual FUD campaign wanes since the great miner migration. Meanwhile, the NFT scene exploded, proving time and again that they are indeed the gateway drug for mainstream adoption.

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Here are our top-5 Q3 2021 crypto highlights:

Bitcoin gaining its lost ground?
A new wave of alternate chains step up to the plate
Gaming tokens dominated Q3 2021, with AXS coming out on top
OpenSea is monopolizing the entire NFT market in NFT Summer
Total spot trading volume is still far from May’s highs

1. Bitcoin gaining its lost ground?

Bitcoin (BTC) was trending downwards throughout Q2 and the start of Q3. This trend was reversed in August, and BTC has since breached the $50,000 mark. The price increase in Q3 came on the back of rather muted trading volume.

Bitcoin ended Q3 2021 at $43,859, a 25% increase quarter-on-quarter and had consolidated since its retracement from Q3's peak.

There were a few noteworthy events in Q3:

El Salvador BTC payments going live
Institutional interest in BTC is increasing, with many seeing it as a hedge against inflation
China outlawed cryptocurrency mining and transactions

2. A new wave of alternate chains step up to the plate

Solana (SOL) and Avalanche (AVAX) are the new stars. Both managed to attract high liquidity, ending the quarter with a 6% and 2% TVL dominance, respectively.

Binance Smart Chain (BNB) maintained its TVL dominance of 11% by end-Q3, but has not recovered since its 20% peak in May 2021.

Attention seems to be shifting to other chains, with notable projects launching on them.

Terra (LUNA) saw its dominance increase to 5% even though it only has a few major protocols like Mirror (MIR) and Anchor (ANC). This is likely in anticipation of the Colombus-5 upgrade which will amongst other things, facilitate the launch of new protocols.

Ethereum (ETH), meanwhile, is maintaining its TVL dominance, even as TVL across all platforms have grown significantly.

3. Gaming tokens dominated Q3 2021, with AXS coming out on top

In Q3 2021, gaming tokens dominated the charts. Axie Infinity (AXS) outperformed other cryptocurrencies in terms of returns, by posting a 3-month return of 965% and having YTD gains of 13,783%.

This is followed by Gala (GALA) and Illuvium (ILV) with a 3-month return of 1,051% and 599% respectively.

In terms of CEX tokens, FTX Token (FTT) token led Q3 with an 87% return. Most of the top CEXs tokens suffered losses in Q2. All top 5 CEXs tokens had positive returns in Q3.

Similarly, the top 5 DEX tokens had positive returns in Q3 as well, gaining 2% to 36% across the board. THORChain (RUNE) only recovered 2% after suffering multiple exploits in Q2. However, PancakeSwap (CAKE) was still up 2,954% YTD.

LUNA posted the best 3-month return in Q3 (+486%), while other DeFi tokens had positive returns between 10% - 36%.

4. OpenSea is monopolizing the entire NFT market in NFT Summer

We are clearly in NFT Summer as NFT trading volumes reached all time highs, shattering previous records. Both OpenSea and Rarible hit a combined trading volume of $6.8B in Q3 2021.

OpenSea continues to exert its monopoly status, contributing more than 99% of the total trading volume by the end of September 2021. Rarible only contributed $21M in the month of September 2021 which is less than 1%.

A big reason why OpenSea has been so successful is also because it is the home ground for Art Blocks which captures a large market share of generative art enthusiasts. The reality is that all NFT Marketplaces (including Art Marketplaces) are losing ground to the behemoth that is OpenSea.

Many attribute the summer to a variety of factors such as the growing maturity of the market. However, the big catalyst came about when institutions legitimized NFTs as an investable asset through their own investments.

5. Total spot trading volume is still far from May’s highs

Overall, Q3 spot trading volume across the top-10 centralized and decentralized exchanges decreased from $6.74 trillion to $3.90 trillion (-42.17%).

Q3 2021 initially trended downwards but rebounded strongly in August 2021 to reach $1.3 trillion.

September’s trading volume for both CEXs and DEXs increased by 214.96% and 171.94% respectively as compared to July. However, both exchanges struggled to reclaim May’s all-time-high.

The DEX-CEX ratio has decreased from 10.44% in Q2 2021 to 8.74% in Q3 2021.

This is just a fraction of what we cover in our report - Grab your copy of the full report:

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