Data & Insights Recap - May 1, 2023

Binance says bye to share

Source: The Block

•  2023 has come so far has come with a lot of shocks for Binance. Their stablecoin, BUSD, is no longer being issued after an order from the New York Department of Financial Services and they were sued by the CFTC for alleged unregistered U.S. trading activity. 
  • Binance also updated their fee structure for spot trading, adding fees back on most BTC pairs (after having no fees since July) and shifting fee incentives to more heavily incentivize TUSD as opposed to BUSD. 
  • The exchange’s U.S. subsidiary came into the spotlight this week after pulling out of the deal to buy the bankrupt Voyager Digital’s assets.
• Binance’s spot market share had been on the rise for over a year, gaining traction from January 2022 into February 2023 and peaking at 62%.
  March marked a slight decline to 56.5% after the BUSD news broke in February. 
  • The implementation of the BTC fees happened at the end of March, which seemed to have eaten into its market share this past month.
    Binance managed to snag 47.8% of the spot market this month, which is still quite a sizable portion but is the lowest share the exchange has had since July 2022, sending it back to levels when one of its main competitors, FTX, was still in business.
    Given all that’s happened, it's not shocking we’d see a drop off in Binance’s traction. No exchange seems to be the main benefactor of Binance’s decline, with many CEXs seeing small increases to fill the void. Upbit, which holds the second-largest market share, saw the largest increase at just over 3%.
    Despite the CFTC lawsuit, Binance has been holding its own in the futures department, claiming, down only slightly in terms of open interest dominance for bitcoin and ether futures compared to the day the news from the CFTC dropped, and it's still maintaining its number one position. 

Absolutely floored

Source: NFT Price Floor

• April saw the decline of many NFT floor prices in ETH terms. Since the start of April, the floor price of a Bored Ape has dropped from over 60 ETH to 49 ETH, with CryptoPunks following a similar pattern. It’s the first time CryptoPunks’ floor price has fallen below 50 ETH since June.  Mutant Apes, Clone X, and Doodles also saw declines.
  • Azuki is the only collection tracked on The Block’s Data Dashboard with a positive floor price performance, rising from 12 ETH to 14 ETH.
  • The fall-off for most of these collections has persisted since before April, but this month did mark a sharp decline for some of the bigger collections. 
• The decline seems to be a testament to the slowing NFT market.
  • We talked last week about how NFT traders on Ethereum faced a sharp cut to lows not seen since the summer of 2021. 
  • April marks the second month in a row we’ve seen NFT marketplace volumes on Ethereum decline as the hype spurred by Blur seems to be dying out. 
  • Starbucks’ most recent NFT collection did not sell out. The UK canceled their plans to launch a collection with the Royal Mint. Dapper Labs’ NBA Top Shot spinoff, NFL All Day, was a massive flop. Meta announced it was leaving its NFT efforts behind. 
• However, that doesn't mean the NFT space isn't moving ahead.
  • This week Yuga Labs (the home of many of the collections mentioned here) announced a new CTO with vast experience in the gaming sector. The firm's CEO also spoke of being the “front door to web3” at Consensus last week.
  • The Pokemon cards that were stolen in production brought along a renewed sense of why NFTs are needed for providing transparency in collectibles.  
  • OpenSea launched their OpenSea Pro platform. 
  • Coinbase is supporting NFTs as a means to build community with a Stand with Crypto campaign centered around the exchange’s ongoing fight with the SEC. 
  • Former U.S. President Donald Trump dropped a second round of his digital trading cards. 
  • So even amidst the recent downturn, there is still a lot to discuss when it comes to NFTs.

Transaction action

Source: The Block

• The 7-day moving average of transactions on the Bitcoin network soared to 446.21k on April 30th, reaching a new all time high.
  • For a network that has been around since 2008 and only breached 400,000 transactions before for a short period in late 2017, this is quite significant.
  • And it isn’t a one-day spike that’s juicing the 7-day moving average; the un-averaged data shows Bitcoin transactions above 400k since April 26th, even breaking 500k on April 30th. 
• Since the start of 2023, Bitcoin transactions seem to be moving in a cyclic matter, with a rise, then a smaller drop-off, then another rise which then exceeds the previous one, then a drop-off, and so forth, leading up to this current rise which has brought us to the most transactions in almost 4 years. 
  • The recent drive seems to be tied to the latest Bitcoin hype around Ordinals, or Bitcoin NFTs, which spurred activity through minting and trading. And while first striking up energy at the end of January, Ordinals Inscriptions have been reaching new heights as of late, attaching metadata to individual satoshis. 
  • Bitcoin has also crossed back over $30,000 a few times in April, which could have piqued investor interest. 
  • Another point of strong Bitcoin sentiment as of late has been the banking failures of this year so far. With both Silicon Valley and Signature being seized by the FDIC this year, all attention has now turned to First Republic Bank, which many fear could be the next to go. 
  • Standard Chartered predicted BTC could reach $100,000 by the end of 2024, citing the recent banking turmoil as a reignition of bitcoin’s core use case.
  • So given this is the first major U.S. banking crisis that we’ve seen since Bitcoin launched after the calamity of 2008, which spurred the innovation of the network and a new innovation on the blockchain is picking up steam, it's not too far-fetched that Bitcoin’s transactions would not reach their all time high. 

New address, who this?

Source: Block Explorers

• 6.77 million new addresses were created across EVM chains on April 25th, a new all time high. 
  • While BNB Chain had the most new addresses at 4.03 million, most other EVM chains have seen a bump in new addresses throughout the month.
    Polygon new addresses went from 398k on April 1st to 1.32 on April 25th and Avalanche went from 94k to 500k over the same time period. Moonbeam’s new addresses are at an all time high at 418k.
  • Solana also saw a bit of an uptick in new addresses, the highest amount since January, but other non-EVM chains did not see the same rise. 
  • One EVM chain that did not bask in the recent new address rally was Ethereum.
• And Ethereum might be the main driver of the recent surge of new addresses on other blockchains, with the average transaction fee reaching over $12 last week, the highest since May 2022.
  • The high fees may have others looking for alternatives, and other EVM chains have the benefit of offering some familiar faces in terms of protocols.
  • While not as significant as the jumps in new addresses, daily active users on BNB Chain, Polygon, and Avalanche also saw bumps. On the other hand, Ethereum’s users have been sliding to the lowest amount since January. 
  • The spike in new addresses has also been sustained, with over 5 million new addresses across all chains being generated every day from April 23rd to 28th, a level that has not been reached since March 2021, which was heavily driven by BNB Chain alone instead of a rise across multiple chains. 

BTC blues

Source: The Block

• The total BTC spot volume across centralized exchanges came in at just 6.36 million BTC for April, dropping over 50% from the 18.3 million of March.
  • Data & Insights fans can probably guess what caused this, as it comes up just about every week since it happened, and I already mentioned it earlier in this edition. 
  • And it almost feels like whiplash to talk about how low bitcoin spot volumes in BTC terms are the lowest they’ve been since September 2019 after we just talked about how transactions on the Bitcoin network are at an all time high, but the two are not always correlated. 
  • Binance in particular took a big hit in BTC volume, shrinking 73% from 13.12 million BTC in March to only 3.53 million BTC this month. On the other hand, Binance’s ETH volume was a bit more stable, only falling to 20.71 million ETH compared to 33.87 million ETH the month prior. Overall ETH spot volumes on CEXs are also only the lowest they’ve been since this past December.
• What’s the cause? Well, given Binance is the main driver of this decline and the exchange’s ETH volumes remained more steady, it seems related to the first full month of Binance putting fees back on BTC/AUD, BTC/BIDR, BTC/BRL, BTC/BUSD, BTC/EUR, BTC/GBP, BTC/RUB, BTC/TRY, BTC/UAH and BTC/USDT has dropped the volumes.
  • The drop in ETH volumes can also be attributed to maker fees being placed back on ETH/BUSD. Maker fees were dropped for ETH/TUSD, but the pair is still putting up the lowest volume of the ETH to stable pairs available.
    It is a testament to Binance’s dominance in the market that a fee increase for them would shrink the BTC monthly volumes to levels not seen since over 3 years ago. 
  • To spice up the competition, crypto options powerhouse Deribit launched spot trading at the start of last week, which only had three pairs at the moment but they are all zero-fee.