The cryptocurrency market experienced a challenging second quarter in 2024, with the total market capitalization declining by 14.4% to close at $2.43 trillion in June. This drop followed an optimistic first quarter that nearly saw new all-time highs.
According to a recent report, the crypto market cap oscillated between $2.30 trillion and $2.90 trillion throughout Q2, failing to reach new peaks. In contrast, the S&P 500 continued its upward trend, ending the quarter with a 3.9% gain. This divergence led to a significant drop in the correlation between the crypto market cap and the S&P 500, from 0.84 in Q1 to 0.16 in Q2.
Volatility remained high in the crypto sector, with the market’s annualized volatility at 48.2% and Bitcoin’s at 46.7%, compared to the S&P 500’s lower 12.7%. After reaching a peak of $73,098 in mid-March, Bitcoin’s price ranged between $58,000 and $72,000, ultimately declining by 11.9% by the end of the quarter. Bitcoin’s trading volume also decreased, averaging $26.6 billion daily, a 21.6% drop from the previous quarter.
Investor sentiment was further impacted by the movement of 140,000 BTC by Mt. Gox and the German government’s sale of seized Bitcoin. Additionally, Bitcoin’s mining hash rate fell by 18.8% after reaching an all-time high of 721 million TH/s in April, marking the first quarterly decline since Q2 2022.
Despite this, the industry saw notable developments, with companies like BitDigital, Hive, Hut 8, Terawulf, and Core Scientific expanding into AI. Tether announced a $500 million investment in mining, and Block completed the development of its new 3nm mining chip.
Ethereum burned 107,725 ETH and emitted 228,543 ETH in Q2, resulting in a net addition of 120,818 ETH to the supply. The burn rate dropped by 66.7% due to reduced network activity and lower gas fees. Only seven days in Q2 had ETH burns exceeding emissions, compared to 66 days in Q1.
Ethereum Gas Fees Reach Lowest Levels Since May 2024 Amidst ETF SpeculationCentralized exchanges (CEX) recorded $3.40 trillion in spot trading volume in Q2, a 12.2% decrease from Q1. Despite the trading volume slump, Binance remained the largest CEX with a 45% market share. Decentralized exchanges (DEX) saw a 15.7% rise in spot trading volume, reaching $370.7 billion, driven by a surge in meme coins and airdrops.
Despite the setbacks in Q2, the crypto market remains dynamic. As new trends and technologies emerge, the industry is poised for potential recovery and growth in the coming quarters.
