The second quarter of 2024 witnessed a sharp downturn in the cryptocurrency market, following a remarkable near-record high in Q1. The total market capitalization dropped by 14.4%, settling at $2.43 trillion by the end of June.
This quarter’s performance reflects the inherent volatility and the dynamic nature of the crypto industry.
Major Events in Q2
One of the highlights of Q2 was Bitcoin’s fourth halving, which proceeded smoothly. Although halvings are typically seen as milestones that could potentially boost market activity, the response this time was subdued. The initial enthusiasm from Q1, largely driven by the approval of US spot Bitcoin ETFs, gave way to a more volatile Q2 for Bitcoin and the broader crypto market.
Key Insights from the 2024 Q2 Crypto Industry Report
The detailed 2024 Q2 Crypto Industry Report by CoinGecko offers a thorough analysis of the crypto market, including Bitcoin and Ethereum performance, trends in decentralized finance (DeFi) and non-fungible tokens (NFTs), and the performance of centralized (CEX) and decentralized exchanges (DEX).
Here are the top highlights:
- Crypto Market Cap Declined by 14.4%: The overall cryptocurrency market cap decreased by 14.4%, ending Q2 at $2.43 trillion. The market fluctuated between $2.30 trillion and $2.90 trillion without reaching new all-time highs. In contrast, the S&P 500 continued to rise, increasing by 3.9% in Q2. This caused the correlation between the crypto market and the S&P 500 to drop significantly from 0.84 in Q1 to 0.16 in Q2. Crypto market volatility remained high, with an annualized rate of 48.2%, compared to the S&P 500’s 12.7%.
- Bitcoin’s Quarterly Performance: Bitcoin ended Q2 at $62,734, marking an 11.9% decline. After hitting a new high of $73,098 in mid-March, Bitcoin’s value fluctuated between $58,000 and $72,000. The halving event did not significantly impact its price. Bitcoin’s trading volume also dropped, averaging $26.6 billion daily, a 21.6% decrease from the previous quarter.
- Decline in Bitcoin Mining Hash Rate: Bitcoin’s mining hash rate fell by 18.8% in Q2, the first quarterly drop since Q2 2022, following an all-time high of 721M TH/s in April. Despite this decrease, the mining sector saw various developments, including expansions into AI and substantial investments, such as Tether’s $500 million investment in the mining industry.
- Popularity of Meme Coins: Meme coins, Real World Assets (RWA), and Artificial Intelligence (AI) were the dominant themes in Q2, capturing 35.7% of the market share. Meme coins were particularly notable, making up four of the top 15 crypto narratives.
- Ethereum’s Inflationary Period: Ethereum saw an increase of 120,818 ETH in circulation in Q2, with emissions surpassing burns. Only seven days in Q2 had burns exceeding emissions, compared to 66 days in Q1. The largest contributor to ETH burns was ETH transfers, which burned 6,838 ETH in Q2.
- Centralized Exchanges Trading Volume: The spot trading volume on centralized exchanges (CEX) totaled $3.40 trillion in Q2, a 12.2% drop from Q1. Binance remained the top CEX, holding a 45% market share despite a decrease in trading volume. Bybit rose to the second-largest spot CEX, surpassing Upbit, with a 12.6% market share by June.
- Decentralized Exchanges Trading Volume: Decentralized exchanges (DEX) saw a 15.7% increase in trading volume, reaching $370.7 billion in Q2. This growth was driven by a surge in meme coins and airdrops. Uniswap continued to lead the DEX market with a 48% share. Thruster and Aerodrome were notable performers, with Thruster’s volume increasing by 464.4% and Aerodrome’s by 297.4%, both benefiting from unique trading conditions in their ecosystems.
The second quarter of 2024 was marked by significant volatility and key developments in the cryptocurrency market. Nonetheless, despite the decline in total market cap and Bitcoin’s value, the sector continued to evolve with notable trends in meme coins, DeFi, and increased DEX trading volumes.
