DeFi, metaverse, NFT… after the crypto winter, what is the state of the market?

Crypto winter seems to be slowly leaving the market. Who are the great survivors of this period of unprecedented crisis?

The crypto winter has done more damage to cryptocurrencies than you think

While the cryptocurrency situation seems to be improving sustainably, it is time to take stock and rebuild the industry. What is the extent of the damage?

To answer the question, Binance Research published a report assessing the state of the industry at the start of 2023. According to him, the crisis would undeniably have affected the main cryptocurrencieswith a loss of market capitalization divided by three for most tokens.

Source: Binance Research Twitter account

DeFi: the fall before the rebound?

The phenomenon is also visible on the DeFi side, although the sector has experienced a crisis since the end of 2021. Thus the total value of decentralized funding would have decreased by 25%.

The loss of capital is of course due to successive crypto crises, especially with the fall of Terra, which kept almost 25% of the total value locked up in DeFi.

Source: Binance Research report

What is causing the exodus of users and even, according to the latest report from CoinGecko, of investors. While decentralized finance drives fundraising explosion in 2021, fundraising fell 42% last year.

The end of the craze for non-fungible tokens

It had already declared itself at the beginning of the year 2022, but the crisis only triggered the non-fungible tokens in their fall. After a resurgence in popularity during the spring, small digital images saw sales stagnate to under $1 billion as of last June.

crypto winter NFT
Source: Binance report

A long period of wading therefore seems to await NFTs, especially as their model is subject to market vagaries as well as various hacks. According to Devin Finzer, CEO of OpenSea, it will be necessary to wait for the latter to clean up their ecosystem to see the investors return.

The reconstruction of the NFT market is therefore in full swing with new economic models such as the purchase of digital works in return for tax benefits. Time will tell whether such initiatives have helped to rectify the situation.

In light of the severity of the crypto winter, it seems somewhat logical that gaming has become the last priority for both individuals and companies. Thereby, plot sales within the various metaverses have declined exponentially from the first frailties in the industry.

Binance Research estimates that the latter would have fallen by 96%, calling into question the sustainability of the sector.

crypto winter metaverse
Source: Binance Research report

Nevertheless, virtual worlds would continue to find their audience, while experts predict their explosion by 2030.

On the crypto gaming side, crypto transactions follow the same pattern with a three-quarter drop following Terra’s fall. Here too, the sector does not seem to be concerned about its situation, as fundraising continues to flow in to the companies.

crypto games

Nevertheless, it is expected that play-to-earn crypto games will have less importance than expected in the overall industry adoption. According to a report by the Blockchain Game Alliance, developers are now content to improve their games to win over new users… but also to keep current ones.

The explosion therefore does not appear to be imminent, but all efforts seem to be made, and these are the most important, for consolidation.

Moral of the story: If the light is nice and clear, winter is behind us.

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