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Binance Research: Key Trends in Crypto – May 2023


Main Takeaways

  • Binance Research regularly publishes in-depth analyses of the latest developments in the various sectors of the Web3 space.

  • In a new blog series, we offer concise summaries of our research team’s findings, inviting you to take a deeper dive into the original reports. 

  • In this article, we preview the recent report that discusses Ethereum’s Shapella upgrade, which kicked in on April 12, alongside other key developments of this past month.

The Binance Research team is committed to delivering insightful analyses of the crypto space. Read on for a summary of their market insights for May 2023.

In financial markets, knowledge is power. Gone are the days when only big institutions and sophisticated financiers used high-quality research to gain insight into the digital asset space. Thanks to Binance Research, users like yourself can now take advantage of the industry-grade analysis of the processes that shape the world of Web3. 

By spreading this work to a wider audience in a series of digestible blog articles, we hope to empower our community with the latest knowledge from the field of crypto research. If you want to take a deeper dive, the full high-quality reports are available on the Binance Research website.

Today, we will explore key Web3 developments this past month to provide an overview of the current state of the crypto ecosystem. We will analyze the performance of crypto, DeFi, and NFT markets before previewing the major events to look out for in May.

Crypto Market Performance

April was a milestone month as crypto markets had a strong run after Ethereum’s Shapella upgrade on April 12. This confidence came immediately after the upgrade with considerable recoveries in major cryptocurrencies. Both bitcoin and ether experienced new highs for the year as the price of BTC exceeded $30,000 and ETH reached $2,100 at one point.

Nevertheless, prices moved up and down before reverting back to early April states. Rumors of a large-scale bitcoin sell-off by the US government influenced this as traders reacted to the news. However, these rumors were proven to be false. 

Following the volatility of the previous month, the market has been left anticipating the possibility of an increase in interest rates by the U.S. Federal Reserve in May.

SOL was the highest performer of the month with an 8% rise in price. This increase came as the total value locked (TVL) on the chain rose over 11% throughout April. BNB, the second-highest performer, also showed stability as it remained in the green throughout the 23rd BNB burn of over two million BNB (approximately $676.6M).

The two lowest performers among the top 10 cryptocurrencies, MATIC and XRP, both saw considerable declines of around 12% in April. MATIC’s decrease has persisted from the previous month alongside a steady fall in its daily active addresses and transactions. Despite a strong March, XRP’s decline could be attributed in part to the regulatory uncertainty it is dealing with.

Decentralized finance (DeFi)

Broadly speaking, decentralized finance (DeFi) markets fell 0.50% by TVL as a whole to $49.5B. Still, the composition of top blockchains by TVL share remained generally unchanged, with Ethereum at 58.4%, Tron at 11.1%, and BNB Chain at 9.7%.

Most notably, TVL on Ethereum hit a high for the year at over $32.1B on April 16. A similar trend was seen for the combined TVL of L2 networks, namely Arbitrum, Optimism, and Polygon, which have also soared to new highs. It remains to be seen how TVL will be impacted by Ethereum’s Shapella upgrade.

Non-fungible tokens (NFTs)

Though non-fungible tokens (NFTs) saw a relatively stable start to the year, NFT trading volume has gradually declined, with this trend continuing into April. By the end of the month, trading volume was nearly half of its January level. A similar situation is seen across other key statistics with the number of daily trades and daily traders, which have dipped to new lows for the year. 

Nansen’s NFT-500 index also recorded a general slump as floor prices for prominent NFT collections fell. In particular, the floor price for Bored Ape Yacht Club (BAYC), a major collection, hit a 5-month low when an NFT whale sold a large share of their BAYC holdings. This sale triggered a general market sell-off as other NFT whales similarly sold their blue-chip NFTs.

Upcoming Events

To help users stay updated on the latest Web3 news, Binance Research has summarized notable events for the month to come. Keep an eye on these upcoming developments in the blockchain space.

Binance Research

As our research arm, the Binance Research team is committed to delivering objective, independent, and comprehensive analyses of the crypto space. They publish insightful takes on Web3 topics including, but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes. 

This article was only a snapshot of the full report, which contains further insights and an exclusive analysis of the most important market charts from the past month. To read the full version of this report, click here. Additionally, you can find other in-depth investigations of the latest Web3 developments by visiting the Insights & Analysis page on the Binance Research website. 

The process of research and knowledge creation is collaborative, so it is important for us to share their work with as much of our community as possible. Take the opportunity to empower yourself with the latest insights from the field of crypto research!

Further Reading

General Disclosure: This material is prepared by Binance Research and is not intended to be relied upon as a forecast or investment advice and is not a recommendation, offer, or solicitation to buy or sell any securities or cryptocurrencies or to adopt any investment strategy. The use of terminology and the views expressed are intended to promote understanding and the responsible development of the sector and should not be interpreted as definitive legal views or those of Binance. The opinions expressed are as of the date shown above and are the opinions of the writer; they may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Binance Research to be reliable, are not necessarily all-inclusive, and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given, and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Binance. This material may contain ‘forward-looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, cryptocurrencies, or any investment strategy, nor shall any securities or cryptocurrency be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Investment involves risks.