Half of 2023 has passed, and cryptocurrencies have led global risk assets, but the upward process has not been smooth sailing. During this period, the currency prices have fluctuated, causing anxiety. SUSS NiFT researcher Jesse Zheng and Biteye core contributor Fishery Isla co-wrote this article to review the top ten events in the cryptocurrency market in the first half of 2023, helping readers learn from them and find the next opportunity.
1) Shanghai Upgrade, a New Chapter for Ethereum Network: Shanghai Upgrade is an important step for Ethereum’s transition from PoW to PoS, bringing staking and withdrawal functions to the execution layer, releasing the liquidity of staked tokens, enhancing investor confidence, and improving network security. Overall, after the upgrade, net inflows of staking still exceed net outflows, and both staking amount and validator numbers are accelerating upwards.
2) Layer2, the Necessary Path for Large-scale Implementation: Arbitrum and Optimism dominate the L2 market with market shares of approximately 64.55% and 18.58%, respectively. The amount of ETH locked in L2 increased from about 3.64 million at the beginning of the year to 4.82 million in mid-June, and the trend of transferring transactions to L2 continues. However, the TPS of all L2s is currently lower than Ethereum, and most L2s have low transaction volumes except for a few leading L2s.
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3) The Rise or Fall of Move Public Chain Ecology: Aptos led a wave of “unlocking frenzy” at the beginning of the year but has since continued to decline. SUI has been declining since its launch in May. In the short term, the chips of Move’s public chain ecology are too concentrated, and the amount of token unlocking is high, resulting in dramatic price fluctuations and a certain level of risk. In the long run, its market share is expected to increase in the next bull market.
4) Blur and NFT Market: BLUR’s airdrop injected great liquidity into the NFT market, bringing a small spring, but also provided an exit opportunity for early NFT whales, resulting in liquidity shrinking again. Azuki’s main series price fell below two digits due to the poor quality of its new series Elementals. However, there are also local markets such as Milady Maker and Pudgy Penguins, which have active communities and continuous work.
5) AI Products such as ChatGPT Impact Web3: The upstream funding sources of Web3 investment institutions have some overlap with AI. If AI continues to be popular, the funding for Web3’s major track will relatively decrease. Therefore, Web3 project parties are trying to align narratives with AI as much as possible or using AI to improve team productivity.
6) Bankruptcy of US Crypto-Friendly Banks Highlights Bitcoin’s Value: In March, the US banking industry suffered a severe run crisis, and stock prices plummeted. Crypto-friendly banks Silvergate Bank, Silicon Valley Bank, and Signature Bank successively went bankrupt, once again highlighting Bitcoin’s value.
7) MEME Craze and Chaos of Dogecoin: The market from late April to early May was a showcase for MEME and Dogecoin, among which Pepe and AIDOGE were most eye-catching. After reaching its peak, the retracement degree of such projects was huge, and the secondary risk was very high.
8) Bitcoin Ecosystem Spring: In February, Nostr and its social app Damus set off a wave of mutual promotion. In addition, the BTC ecosystem created Brc20 based on ordinal theory, followed by Orc20, GBRC721, Stamp, etc.
9) Hong Kong Takes Big Steps towards Web3: In November 2022, the Hong Kong government released a “Policy Statement on the Development of Virtual Assets” and held the Web3 Carnival in April this year. Hong Kong’s friendly attitude towards Web3 is expected to attract a large number of practitioners who are restrained by regulations to open up new opportunities in Hong Kong.
10) SEC’s Battle with the Crypto Community: On June 5th, the SEC sued Binance US and CEO Zhao Changpeng for allegedly violating federal securities laws by illegally offering and selling securities to US investors. The next day, it sued Coinbase, alleging that it provided multiple cryptocurrencies deemed as securities to investors without registering as a broker, national securities exchange, or clearing agency. It can be foreseen that American practitioners will consider relocating to more crypto-friendly countries and regions due to regulatory pressures.