Introduction
This report is a February 2024 cryptocurrency market report prepared by Binance Research.
This review is entirely based on the original report Binance Research "Monthly Market Insights - March 2024". It provides a detailed analysis of key events and trends in the cryptocurrency market for February 2024, including general market dynamics, main metrics of the DeFi and NFT segments, interesting cases and expected events.
Although the original document is quite lengthy, this review seeks to condense the most important information for the benefit of readers.
I hope that this review will help you better understand the current state and prospects of the cryptocurrency market, as well as the key factors influencing its development.
If you want to keep abreast of the latest cryptocurrency news, then subscribe to my telegram channel: @cryptosamec
Main conclusions
The cryptocurrency market experienced a strong rally in February, ending the month with a 40% increase in total market capitalization - a level not seen since October 2021. The launch of spot BTC ETFs proved successful, continuing to attract capital to the market.
On March 8, 2024, International Women's Day, women make up about 37% of global cryptocurrency owners. This is a significant increase from 21% in 2021.
EigenLayer, a restaking platform on Ethereum, recently saw explosive TVL growth of over 800% year-to-date. Liquid restaking protocols grew by 300% in February.
The Uniswap Foundation has proposed an update to distribute protocol fees among UNI stakers and delegators. This can be a significant source of profitability.
Since its public launch on February 19, Ethena's USDe has quickly attracted capital, with its issuance skyrocketing to $565 million while the number of users exceeded 31K. Key drivers were the Shards rewards program and high advertised returns.
Dynamics of the cryptocurrency market
The cryptocurrency market experienced strong growth in February, ending the month with a 40% increase in total market capitalization. Spot BTC ETFs have attracted more than $4.9 billion, while outflows from Grayscale have decreased markedly compared to January.
All top 10 cryptocurrencies showed positive dynamics in February. DOGE, BTC and ETH led the way with monthly gains of 46%, 45.5% and 44.5% respectively. The BTC price at the end of the month was $62,500.
BNB surged 35.1% thanks to the continued rollout of Binance Launchpool events. It was followed by TRX, ADA and LINK with gains of 27%, 25.6% and 22.7% respectively.
SOL, AVAX and XRP showed slightly less growth - by 16.6%, 14.6% and 12.8%.
Decentralized Finance (DeFi)
TVL in DeFi also increased significantly in February by 50%. Ethereum's gain was particularly noticeable at 57%, while the rest of the top 10 networks saw modest growth of 20-30%.
The volume of derivatives in DeFi reached a new monthly record of $208 billion (+62% compared to January). This indicates both the return of speculative activity and the growth of DeFi derivatives infrastructure in recent years.
Non-fungible tokens (NFTs)
The NFT market remained relatively stable throughout February, recording total trading volume of $1.23 billion (+3.3% compared to January). The spotlight was on Pandora - the first NFT collection on the ERC-404 standard, which raised $147 million in a month.
In terms of NFT sales among top blockchains, Ethereum showed an increase of 55%, while Bitcoin continued to slow down since January (-10%). Polygon had a notable 70% month-on-month decline.
Interesting charts of the month
Growing presence of women in the crypto industry despite fewer numbers
According to GWI, of the 420 million global cryptocurrency owners, only 37% are women, and 63% are men. However, women's participation has increased significantly in recent years, from 21% in 2021.
Uniswap offers commission payouts
The Uniswap Foundation proposed distributing protocol fees among UNI stakers and delegators. With Uniswap fees regularly exceeding $50 million per month, this could be a significant source of profitability for stakers, depending on the exact parameters.
As a result of the news, the UNI token rose over 58% from ~$7 to $11 by the end of the month. Many other large DEX tokens, such as SUSHI, also rose. The top 20 DeFi tokens overall gained more than 20% after the announcement.
EigenLayer is growing rapidly
EigenLayer, a restaking primitive on Ethereum, recently saw explosive growth in TVL, which is up over 800% year-to-date. EigenLayer is taking a phased approach to launch, using restrictions on the amount of re-staking.
The recent temporary lifting of limits from February 5th to 9th saw TVL increase by more than 180% from $2 billion to $6 billion. TVL now exceeds $10 billion, and EigenLayer is among the top 5 DeFi applications.
The growing liquid restaking sector has contributed to this growth. Protocols like Renzo and Ether.Fi allow you to participate in re-staking while maintaining liquidity through the tokens. In February they grew by more than 300% from $1 billion to $5 billion TVL.
Ethena's "synthetic dollar" USDe is rapidly gaining momentum
Ethena's USDe is an Ethereum-based "synthetic dollar" backed by crypto assets (ETH and staked ETH) as well as similarly sized short futures positions. This delta hedging mechanism is intended to provide stability to the USDe peg.
Since its public launch on February 19, USDe has attracted a large amount of capital and its issuance has skyrocketed to $565+ million with over 31K users. If USDe retained its stablecoin status, it would rank 8th in value.
USDe's growth has been significantly aided by two factors: the launch of the Shards rewards program and, more importantly, the touted high returns. The latter is the result of a combination of native staking returns and funding rates paid to shorts.
However, questions remain about the sustainability of the Ethena model, especially its dependence on high short funding rates. Critics warn of the risks of a potential rate cut that could worsen yields and impact USDe's stability. But it's too early to judge, and it will be interesting to see how this develops.
Upcoming Events and Token Unlocks
Conclusion
February 2024 was another big month for the cryptocurrency industry, as evidenced by detailed analysis provided by Binance Research in the "Monthly Market Insights - March 2024" report. This review highlighted the key trends and events shaping the current state and future of the cryptocurrency market.
Among the most important takeaways is an impressive 40% growth in total market capitalization, fueled by capital inflows through spot BTC ETFs, as well as significant progress in the development of the DeFi and NFT industry. Positive changes in the demographics of crypto users are also indicative, in particular the growing presence of women.
However, despite the overall optimism, the report also notes potential risks and challenges, such as questions about the sustainability of some business models. This highlights the need for a balanced and prudent approach to navigating the rapidly evolving cryptocurrency landscape.
If you want to keep abreast of the latest cryptocurrency news, then subscribe to my telegram channel: @cryptosamec
