February 21, 2024

The market valuation of the crypto sector has risen significantly by 110 percent year-to-date, a report compiled by Binance said over the weekend. In the fourth quarter of 2023, the crypto market rose in value by $870 billion, which marks a 55 percent boom from this year’s third quarter that lasted between July and September. The improvement in the sales of non-fungible tokens (NFTs) these recent months, along with the buzz around Bitcoin ETFs waiting for approvals in the US, have emerged among the top reasons, launching the crypto market cap up the price ladder.

This change in the market status comes as a breath of fresh air for investors, who had been part of a slowed-down market since the end of 2021.

As Bitcoin climbed to its nineteen-month high value of around $44,000 (roughly Rs. 36 lakh), NFTs built on the Bitcoin blockchain also recorded an uptick in their values. Ordinal NFTs, which are inscribed on the smallest unit of BTC called Satoshi, not only created hype this year but also became a means that drew the market’s focus towards the NFT sector again.

In the last two months, two other significant developments around Bitcoin have contributed to breathing life back into the crypto sector, Binance said. The filings for providing BTC ETFs in the US by asset management firms like BlackRock and the emergence of BTC’s first BRC-20 token Ordi — are the two notable events that helped Bitcoin bump in prices, consequently pulling other altcoins into yearly recoveries.

“NFT volumes have broken their eight-month downtrend and increased nearly 200 percent month-on-month (M-O-M) in November. Bitcoin was the most popular chain, with over $375 million (roughly Rs. 3,128 crores) in NFT volume, exceeding even Ethereum NFTs that made $348 million (roughly Rs. 2,903 crore),” the report said. “Bitcoin has had an eventful year with Ordinals and BRC-20s and saw a resurgence in interest in November. News of a spot Bitcoin ETF looks positive.”

Along with Bitcoin’s market reviving performance, other factors have also contributed to making the crypto market cap swell to its current valuation of over $1.6 trillion (roughly Rs. 133,48,856 crore), Binance added.

The report noted that many alternative Layer-1 blockchains have outshone Ethereum recently. Eco-friendly blockchain Solana and Telegram-related blockchain Toncoin have both managed to make an evident dent in the market.

Similarly, the landing of Zero-Knowledge (ZK) protocols also opened discussions around the expansive use cases of blockchain technology.

In November, the fees for the top 20 crypto projects also spiked by 84 percent compared to October and hiked to over 100 percent higher in comparison to September this year.

“The last few weeks have been exciting and a helpful change of pace from the building-focussed months that came before. As the noise increases, new entrants join the market, and things get more frenzied, it is crucial to make sure you are tracking the right metrics and following the important narratives,” the report noted.


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