Ted Hisokawa
July 16, 2024 12:47
According to CoinGecko’s Q2 2024 report, the cryptocurrency market is set to drop 14.4% due to the Bitcoin halving, a decrease in mining hashrate, and changes in trading volume.
According to CoinGecko’s latest report, the second quarter of 2024 saw significant changes in the cryptocurrency landscape. While price action was subdued, the period was marked by notable developments, including Bitcoin’s anticipated fourth halving and fluctuations in trading volumes on both centralized and decentralized exchanges.
Total cryptocurrency market cap in Q2 2024 drops by -14.4%
Total cryptocurrency market capitalization fell 14.4%, ending the quarter at $2.43 trillion. This decline contrasted sharply with the S&P 500, which rose 3.9% over the same period. The correlation between cryptocurrency market capitalization and the S&P 500 plummeted from 0.84 in Q1 to 0.16 in Q2, highlighting the divergent paths of these markets.
Volatility remained a prominent feature in the cryptocurrency markets, with annualized volatility at 48.2%, while Bitcoin’s volatility was slightly lower at 46.7%. In comparison, the S&P 500’s volatility was significantly lower at 12.7%.
Bitcoin (BTC) Q2 closing price $62,734, -11.9% down
Bitcoin (BTC) fell 11.9% to end the quarter at $62,734. The cryptocurrency previously hit a new all-time high of $73,098 in mid-March. The long-anticipated fourth halving of Bitcoin had little impact on the price, and trading volumes also declined, falling 21.6% to an average of $26.6 billion per day compared to Q1.
The quarter ended on a cautious note, with market participants cautious after reports that Mt Gox and the German government were moving significant amounts of bitcoin.
Bitcoin mining hash rate decreased by -18.8%
Bitcoin’s mining hash rate fell 18.8% in Q2, the first decline since Q2 2022. The hash rate had hit an all-time high of 721M TH/s in April before the decline. Despite the decline, the mining sector has seen significant investment and expansion, including a $500 million investment from Tether and the development of new mining chips from Block.
Meme Coins and AI Drive Market Narratives
Meme coins dominated the market narrative alongside real-world assets (RWA) and artificial intelligence (AI), accounting for 35.7% of the market share. Meme coins were particularly popular, with four of the top 15 cryptocurrency narratives being meme-related. Solana and Bayes emerged as the most popular blockchain ecosystems, accounting for 22.9% of the market interest.
Ethereum (ETH) becomes inflationary
Ethereum (ETH) saw its supply increase by 120,818 ETH in Q2 as emissions outpaced burns. A total of 107,725 ETH were burned, while 228,543 ETH were emitted. The burn rate decreased by 66.7% quarter-over-quarter due to lower network activity and lower gas fees. There were only 7 days in Q2 when ETH burns exceeded emissions, compared to 66 days in Q1.
Decrease in central exchange (CEX) trading volume
Centralized exchanges (CEXs) recorded a total spot volume of $3.4 trillion in Q2, down 12.2% from Q1. Binance maintained its position as the largest CEX with 45% market share. Bybit surged to become the second-largest spot CEX, surpassing Upbit, and increased its market share to 12.6%.
Among the top 10 CEXs, Gate.io had the highest growth in trading volume, with a 51.1% increase, followed by Bitget and HTX with 15.4% and 13.7% growth, respectively.
Experience with the growth of decentralized exchanges (DEX)
Decentralized exchanges (DEXs) recorded a total volume of $370.7 billion in Q2, up 15.7% from Q1. Uniswap remains the dominant DEX, with 48% market share. Thruster and Aerodrome emerged as significant beneficiaries, with Thruster’s volume increasing 464.4% and Aerodrome’s 297.4%, both capturing 3% market share by the end of June.
For detailed analysis and comprehensive insights, the full report is available on the CoinGecko website. (Source name)
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