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Q1 2024 Crypto market sector snapshot

Sector updates Research reports

This is our Q1 2024 crypto market sector snapshot, a report from our Sygnum investment research. 

Over the past few months, the crypto market experienced substantial growth, catalysed by rumours and the SEC’s long-awaited approval of BlackRock’s Bitcoin spot ETF. The exciting pace of Bitcoin’s protocol innovations led to increased activity, but Solana took the L1 spotlight, with the market favouring its scalability advantages, driving explosive growth to its ecosystem and token despite the FTX bankruptcy estate liquidating a sizeable stake. The L2 sector was the best-performing sector, reversing 6 months of underperformance, with TVL doubling and the introduction of inscriptions on L2 networks driving transaction volumes to new highs. Newcomer Metis launched the market’s first decentralised sequencer and saw its token increase sevenhold. TVL in DeFi increased nearly 50 percent as market sentiment turned bullish and token prices increased, while the popularity of liquid staking and the newly emerged Etheruem re-staking market segment drew considerable interest to the sector. Solana’s DeFi market share tripled, with Solana-based DEX Jupiter briefly flipping market leader Uniswap in daily transactions. The Web3 sector also stood out as the market rewarded interoperability and projects showing fast user growth, with the proliferation of AI serving as a major driver for many protocols.

Meanwhile, the stablecoin sector finally broke a 17-month decline, supported by increased regulatory clarity and TradFi launches. Despite higher traded volumes, CeFi was the worst performing sector due to ongoing lawsuits, though Binance managed to recapture some of its market share. The gaming and metaverse sectors continued to lag, but AI and scalability improvements could help drive growth, while Apple Vision Pro’s crypto metaverse hints at the potential of multisensory technology in the metaverse sector.

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The information in this publication pertaining to Sygnum Bank AG (“Sygnum”) is for general information purposes only, as per date of publication, and should not be considered exhaustive. This publication does not consider the financial situation of any natural or legal person, nor does it provide any tax, legal or investment advice. This publication does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum to purchase or sell any assets. No elements of precontractual or contractual relationship are intended. While the information is believed to be from accurate and reliable sources, Sygnum makes no representation or warranties, expressed or implied, as to the accuracy of the information. Sygnum expressly disclaims any and all liability that may be based on such information, omissions, or errors thereof. Any statements contained in this publication attributed to a third party represent Sygnum‘s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. Sygnum reserves the right to amend or replace the information, in part or entirely, at any time, and without any obligation to notify the recipient of such amendment / replacement or to provide the recipient with access to the information. Simultaneously, there is no obligation of Sygnum to inform recipients of information, if before provided information later becomes outdated, inaccurate or obsolete, unless otherwise provided by applicable law. The information provided is not intended for use by or distributed to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which Sygnum does not hold the necessary registration, approval authorization or license. Except as otherwise provided by Sygnum, it is not allowed to modify, copy, distribute or reproduce, display, license, or otherwise use any content for commercial purposes.

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