Bitcoin, the leading digital currency, had a phenomenal first quarter in 2023, outperforming the Nasdaq Index and gold, according to the latest Coingecko crypto industry report. Bitcoin’s price rallied from just below $17,000 at the end of 2022 to surpass the $28,000 mark by March 31. The quarterly growth of 72.4% makes Bitcoin the best-performing asset during the period. The Nasdaq index and gold were the second and third-best performers with gains of 15.7% and 8.4%, respectively.
In January 2023, the market started rallying, and trading volume saw an upswing. It then spiked in early March, due to increased volatility from the banking crisis, before tapering off in late March when Binance removed part of its zero-fee trading incentives for BTC, the Coingecko report said.
It’s worth noting that the US banking crisis might be the primary reason why interest in this asset class has surged. Bitcoin’s adoption as an inflation hedge could also drive more positive sentiment moving forward.
The report also revealed that stablecoins lost ground in Q1 as the market capitalization of this asset class dropped by 4.5% or $6.5 billion. The decline happened due to the shutdown of Binance USD (BUSD) by Paxos and the brief USD Coin (USDC) de-pegging event during SVB’s collapse.
However, decentralized finance (DeFi) had a surge of 65.2% in market capitalization to close the quarter at $29.6 billion. Liquid staking governance tokens saw their value grow by 210.9% in Q1, making them the third-largest category in DeFi.
Non-fungible token (NFT) platforms also had increased trading volumes during the period. Trading volumes went up from $2.1 billion in the last quarter of 2022 to $4.5 billion. According to the report, a significant share of these volumes came from Blur, which recently took Opensea’s place as the most dominant NFT platform.
As the world continues to experience economic turbulence due to the ongoing COVID-19 pandemic, Bitcoin’s use case as a decentralized, borderless, and digital store of value and medium of exchange becomes clearer. The report’s findings indicate that investors are turning to the cryptocurrency as a safe haven due to inflation concerns in traditional markets.
The Coingecko report showed that Bitcoin outperformed major asset classes, such as gold and the Nasdaq index, during Q1. It remains to be seen if the trend will continue through the year. However, given the increasing demand for non-fungible tokens, decentralized finance, and other blockchain-based applications, it is likely that investors will continue to be interested in digital assets. The growth potential of cryptocurrencies and their underlying technology has generated significant excitement in the financial industry, and it will be fascinating to watch how these new technologies change the markets in the years to come.
