Binance Publishes Q3 Market Pulse Report Describing Quarter as Challenging for Crypto Market

According to the Binance report, the crypto market saw declines across the board in Q3, as fundraising and developer activities tanked.

Binance has called the third quarter of 2023 “a challenging quarter” for crypto. In its Q3 “Market Pulse” report, Binance highlighted a few drawbacks the crypto industry faced, adding insights and shedding light on the general state of the industry.

The report revealed declines in the industry across several points. For instance, Binance notes that the total market capitalization fell by 8.6% quarter-on-quarter (QoQ) despite a rally following Ripple and Grayscale’s court wins. Nevertheless, Binance stated that institutional adoption increased with Grab, PayPal, Sony, and Deutsche Bank.

Binance also reported a decline in QoQ developer activity as the weekly active developer count has fallen. On the bright side, projects like Chainlink are recording increases. While Chainlink recorded a 363% rise in developer activity, Taiko and Zora saw 200% and 100%, respectively.

Binance Report Notes Significant Reduction in Q3 Fundraising

In addition, the crypto market saw a decrease in fundraising activity. Binance specifies that in Q3 2023, the industry recorded the lowest amount since Q4 2020. Specifically, total funds raised fell by 21.4%, while fundraising rounds dropped by 24.9%.

The gaming and metaverse sectors got some action, with Futurewave receiving $54 million to create AI-focused consumer games. Hong Kong-based Animoca Brands also raised $20 million to develop its Mocaverse project. However, infrastructure was the sector that raised the most funds year-to-date (YTD), compared to NFT, DeFi, gaming, metaverse, and CeFi.

Also, in Q3 2023, Binance reports that the Crypto Fear & Greed Index lost 9 points, falling below 50. The index analyzes the crypto market and generates a number between 0 and 100. A low number indicates that there is fear in the market and that investors are selling. When the number is high, it reflects positive market sentiments and usually means people are buying more.

Generally, activity fell on most blockchains. However, Near was a clear exception in Q3 as it witnessed an increase of about 120% QoQ. Others like Solana and BNB Chain recorded decreases.

In DeFi, the total value locked (TVL) fell 13.1%. Despite losing 18.6%, Ethereum held its position as the largest blockchain with a TVL of 55.1%. Tron’s QoQ TVL increased by 17.9%.

NFTs and Blockchain Transaction Fees

Since January 2021, sales of NFTs were the worst in September as interest continued to decline. While the average sale for the month fell over 95% from $791.84 in August to $38.17 in September, general sales also declined to $300 million.

For ETH, the average transaction fee decreased to $4.8 in Q3, back to the exact average from the year’s first quarter, even though it nearly doubled to $8.8 in Q2. Binance suggests that the plunge is due to the increased use of layer 2 networks, which take some pressure off the Ethereum blockchain. Furthermore, the amount of staked ETH increased in Q3, with about 22% of all ETH in circulation staked in the quarter.

Binance also reported a fall in BNB Chain’s average transaction fees to $0.09 in Q3, the lowest for the year. While Q1 came in at $0.19, the average in Q2 was $0.14.

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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.