The state of crypto – September 2023

Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.

Short-term

The crypto market continues to show absolutely zero sign of life, similar to the past couple of months. The spot volume is at a 4.5-year low, fueled by non-existing volatility. It appears that no new capital flows into crypto, especially from retail investors amid macro uncertainty and high-interest rates, so the crypto market is now only cared about by die-hard crypto enthusiasts. The positive aspect, though, is that it appears that these die-hard crypto enthusiasts accumulate crypto, including Bitcoin and Ethereum, as the percentage of these cryptocurrencies on exchanges remains on a downward trajectory month-over-month. This implies that less Bitcoin and Ethereum are available to be sold on short notice by having been transferred off exchanges.

The absence of new capital and speculative retail means that the needle in terms of price is not as easily moved, even as positive news breaks. This was evident as late as last week when the largest crypto asset manager Grayscale won a lawsuit against the Securities and Exchange Commission, effectively forcing the agency to review Grayscale’s application to turn its Bitcoin trust into an ETF. This court ruling barely moved crypto prices, although the ruling is greatly positive for the market, highlighting the present exhausted nature of crypto.