According to Dappradar’s latest crypto industry report that covers 2022’s third quarter, the crypto economy and its participants are “riding out the bear market.” However, these days a number of macroeconomic events have influenced the crypto market, and Dappradar researchers say it’s currently “impossible to foresee a worldwide expansion of cryptocurrencies without a general recovery in conventional financial markets.”
Dappradar Report Highlights Crypto Economy’s Slow but Steady Recovery
The crypto industry is still dealing with the crypto winter and the latest report from Dappradar indicates that markets and participants are trucking through the storm. For instance, following the Terra collapse, the decentralized finance (defi) and decentralized app (dapp) industry has consolidated after taking heavy losses.
Dappradar’s report shows that bitcoin (BTC) and ethereum (ETH) have remained roughly around the same price since the end of June, but the two leading crypto assets have a high correlation with equity markets.
“In Q3, the correlation between BTC and the S&P 500 increased, showing that investors still consider cryptos in the same category as risky stocks,” Dappradar’s researcher Sara Gherghelas details.
Moreover, while Ethereum’s transition from proof-of-work to proof-of-stake via The Merge pushed prices up, crypto markets “cooled down after the event.” Moreover, while Dappradar’s Gherghelas says The Merge was a technical success, a 36% drop in layer two (L2) transactions was recorded.
Despite the overall crypto market performance, technology adoption saw a significant upswing. “In July, Polygon and Nothing company announced a partnership to build a Web3-native smartphone, while Disney, Ticketmaster, Mastercard, and Starbucks became the latest leading brands to announce the integration of NFTs as part of their Web3 strategy,” Dappradar’s Q3 report further notes.
According to the Dappradar researchers, $428.71 million in losses were recorded during 2022’s third quarter. Most of the losses were stolen from Nomad Bridge, Dappradar explains, as $190 million was siphoned away from the bridge.
“On a positive note, these figures indicate a decline of 62.9% compared to the third quarter of 2021, when hackers and fraudsters stole $1,155,334,775,” Dappradar’s researchers add. During the last quarter, the study notes that in general, the defi ecosystem has shown improvement.
“Defi as a whole showed signs of recovery with a 2.9% growth in TVL [total value locked] from Q2,” Dappradar’s study notes. “Ethereum remains the most dominant chain with its dominance increasing to 69% with $48 billion, a 3.17% growth from Q2.”
While the defi ecosystem and crypto economy as a whole saw declines in the third quarter, non-fungible token markets also recorded a decline in trading volume activity. Dappradar’s research shows NFT trade volume is down 67% but NFT sales volume increased 8.3% higher from Q2.
“The rise in sales indicates that the NFT business continues to be in great demand, whereas overall the drop in trading volume may be attributable to the decline in cryptocurrency values,” Dappradar’s research report suggests.
Dappradar’s report concludes that the global economy is dealing with “extreme challenges” and in some people’s opinions, the tides may get worse. The researchers note that it’s possible “we may be in the beginning phase of the crisis” but when the tides do turn, a bullish runup will eventually materialize.
“Undoubtedly, a further bull run will occur, and it may be much stronger than the last one,” the Dappradar report’s closing statements detail. “Each time the market has difficulties, it eventually becomes stronger, and the quality of initiatives increases.”
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