On July 13, dedicated crypto price, volume, and market cap web portal Coingecko released the company’s “Q2 2022 Cryptocurrency Report,” which covers stock and market cap information. crypto market over the past quarter. The 46-page report details how the fallout from Terra UST and LUNA wreaked havoc on the entire crypto ecosystem and stablecoin economy. Additionally, Coingecko researchers claim that “a decrease in stablecoin market share suggests that a certain amount of capital has left the crypto ecosystem altogether.”
Coingecko data suggests Q2 investors exited stablecoins rather than de-risk them
Coingecko released the company’s second quarter cryptocurrency report for 2022 as there have been a number of significant changes over the past three months. The study, published last Wednesday, notes that the second quarter of 2022 was “filled with many unfortunate events in the crypto space.”
The crypto firm’s report explains that while spot market trading volumes remained flat at $100 billion per day, “the top 30 coins have lost more than half of their market capitalization since the previous quarter. “. Much of the crypto error started from a domino effect caused by the collapse of Terra UST and LUNA.
Coingecko details that just before the fall of the UST, the stablecoin was the third largest fiat token in existence, and $18 billion was wiped out in just a few days. The report notes that BUSD has managed to become the third largest stablecoin. Apart from Terra’s UST, other stable assets have seen their valuations suffer and analysts at Coingecko suspect that a specific amount of funds has left the crypto economy. The researcher’s study from the second quarter of 2022 says:
The slight decrease (excluding UST) in stablecoin market share suggests that some capital has left the crypto ecosystem completely, unlike last quarter, when investors likely reduced risk in stablecoins in the middle of market uncertainty.
Terra and 3AC fallout spreads, Defi market cap plummets
The 46-page report further explains how Lido’s bond assets were affected by the Terra explosion and the demise of crypto hedge fund Three Arrows Capital (3AC). A specific chart shared in the study shows how 3AC’s financial troubles have directly or indirectly affected at least 12 different crypto companies.
Decentralized finance (defi) was also affected, as the Coingecko authors say “Due to third-order effects, defi protocols such as Maple Finance were not spared as some users’ funds were lent to Orthogonal Trading, which in turn had gone to Babel Finance, one of 3AC’s creditors.
Defi itself has suffered a lot and data from Coingecko shows that defi’s market capitalization has fallen from “$142 billion to $36 billion in the space of 3 months”. The report again states that much of defi’s value has been “wiped out largely due to the collapse of Terra and its stablecoin, UST.”
Coingecko’s study covers a wide variety of topics related to Q2 2022 crypto stock and touches on topics such as other stablecoins losing pegs, decentralized exchange (dex) volumes, non-fungible tokens (NFT) and NFT markets. While the second quarter saw plenty of action, Coingecko’s report highlights how bearish and dismal most of it was.
What do you think of the Coingecko report and the action recorded in the second quarter of 2022? Let us know what you think about this topic in the comments section below.
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