The first quarter of 2022 was both difficult and interesting for the crypto industry, cryptocurrency data monitoring platform CoinGecko noted in its “Quarterly Report Q1 2022” report.
Cryptocurrencies had a rough start to 2022, with their overall value dropping by over 25% during the first few weeks of January. However, a lot happened in the crypto industry in the first quarter, which put an interesting spin on the crypto market.
Cryptocurrency price data monitoring platform CoinGecko has summarized the most important events that occurred in the crypto industry during the first 90 days of the year. In its report “Quarterly Report Q1 2022”, the platform highlighted the scope and challenges faced by the cryptocurrency market.
Although it is a young industry, with only 13 years of development, CoinGecko points out that the cryptocurrencies, and technology blockchain continue to spread to different economic sectors and areas of activity, so there is much to expect from this industry for the rest of the year.
Inflation, the invasion of Ukraine and the Fed's monetary policies
The macroeconomic consequences of the Russia-Ukraine war, along with high levels of inflation and the tightening of monetary policies by the United States Federal Reserve (FED), caused the crypto market to fall by more than 25% in January.
However, as the report notes, the crypto market has managed to weather the situation and has recovered in recent weeks to almost the levels seen at the beginning of the year.
The market capitalization of cryptocurrencies was $2,2 trillion at the time of publication of the report, although at the time of going to press it has fallen back to $XNUMX trillion. 1,97 trillions of dollars.
The top 5 cryptocurrencies on the market, such as Ethereum (ETH), Solana (SOL) and Binance Coin (BNB Faucet), closed in losses in the first quarter, although Bitcoin (BTC) showed some resilience, with gains of 1,6%. However, other cryptocurrencies such as Terra (MOON FABRIC), Ethereum Classic (ETC) and Waves (WAVES) were the exceptions and showed an average growth of 100%, which led these assets to close March in the green.
LUNA's appreciation is related to the Luna Foundation Guard's decision to acquire large amounts of bitcoins to guarantee its stablecoin TerraUSD (UST).
Cryptocurrency trading volumes decline
Compared to the first quarter of 2021, trading volumes in the cryptocurrency market during the first quarter of this year decreased significantly, by 23%, CoinGecko reported.
NFTs and stablecoins benefit
It seems that traders and merchants in the crypto market opted for cryptocurrency platforms. NFT as the market fell. According to CoinGecko, NFTs saw growth in trading volume between January and March compared to the previous quarter.
The acquisition of the CryptoPunks and Meebits crypto collections by Yuga Labs and the launch of the ApeCoin token (APE), from the Bored Ape community, were the most important events in the NFT sector, expanding the usefulness of these digital assets.
The stablecoins Stablecoins also benefited from the drop in value caused by the uncertainty of the new monetary policies of the FED in cryptocurrencies. The data indicates that stablecoins gained more than $23.000 billion in capitalization during the first quarter. The stablecoin TerraUSD (UST), from the Terra ecosystem, grew more than 60% in capitalization.
From Play to Earn to Move to Earn
A new game mechanic is gaining adoption and popularity in the crypto industry. According to CoinGecko, the move Play-to-Earn seems to have slowed down in the first quarter of 2022, giving way to a new trend called Move to Earn.
Several blockchain games have begun to adopt this mechanic, which allows players to earn money while taking care of their physical well-being. The most popular game currently within this game mechanic is STEPN, based on the Solana blockchain.
Ethereum 2.0 is coming soon
Ethereum developers also took important steps to get closer to Ethereum 2.0, the next big evolution of the network of Smart contract towards scalability and energy efficiency.
In mid-March, the Kiln testnet was launched to test the merger between Ethereum and Ethereum 2.0. Later, the developers created a shadow fork Ethereum to begin testing the merger of both networks into the mainnet, which represents a milestone for the operation of this blockchain.
The successful merge on the Kiln testnet boosted the market price of ETH, which surpassed $3.400 per unit at the end of March.
There are more than 2.0 tokens on the Ethereum XNUMX Beacon Chain. 11,5 million ETH deposited, which represent more than 9% of the total circulating supply of this cryptocurrency.
DeFi, a bumpy road in 2022
Finally, CoinGecko noted that hacks to decentralized finance platforms and protocols (DeFi) led to the loss of over $1.000 billion in crypto assets. The platform indicated that much of the money stolen in DeFi in the first quarter of this year was due to security vulnerabilities exploited in cross-chain bridges. The latest of these was the Ronin Bridge on the Ronin Network, with over $600 million stolen from the protocol in ETH and other crypto assets.
Several DeFi tokens also collapsed this first quarter, with falls of more than 50% in just a few hours, following the news that Andre Cronje, a prominent developer and contributor to the ecosystem, announced his final retirement and the closure of several of his associated projects, causing great commotion in the industry.
CoinGecko's quarterly report also acknowledges that liquidity deposited on several protocols built on scalable blockchains, such as Terra, Waves, and Optimism, increased significantly in the first quarter. In fact, Terra is currently positioned as the second most liquid blockchain in the decentralized financial ecosystem, with a total value deposited (TVL) of 26.260 million.
Continue reading: Ethereum prepares to activate Proof of Stake on its network
