Q3 2020 was a very essential period for the growth of Decentralized Finance (DeFi). Other than the minor dip in mid-September, we have seen a continuous uptrend in the total crypto market cap since the March crash.
In Q3 we also saw many new decentralized exchanges gaining popularity thanks to the yield farming trend kick-started by Compound in June. Decentralized exchanges continue to grow at a much faster rate than its centralized counterparts which we will continue looking at.
There is much to unpack in the CoinGecko Q3 2020 Quarterly Cryptocurrency Report.
Here are some of the main highlights:
- Market Capitalization continued to grow amidst September uncertainties.
- The price of bitcoin reached a new peak at $12,272 on August 18th.
- Over $9 billion capital inflow that was propelled by yield farming movement in the DeFi scene.
- Uniswap strengthens its dominance of the DEX market as DeFi gains popularity.
Market Capitalization continued to grow amidst September uncertainties.
In Q3, the crypto markets experienced positive growth of +31% in market capitalization and +34% in trading volume which illustrates market recovery in terms of trading volume.
However, towards the end of the quarter, market uncertainties such as COVID-19 and the U.S. elections in the upcoming November reinjected fear into the markets and trimmed Q3 gains.
The price of bitcoin reached a new peak at $12,272 on August 18th.
We are seeing a record-breaking period for Bitcoin since the crypto winter in 2018. For 65 consecutive days, Bitcoin managed to stay above the $100,000 benchmark for the first time.
This quarter also saw the price of Bitcoin reaching a new peak at $12,272 on August 18th, almost knocking over the 2019 high of $12,996. However, the faltering trading volume indicates that investors may be staying on the sidelines due to economic uncertainties.
Over $9 billion capital inflow that was propelled by yield farming movement in the DeFi scene.
Q3 2020 saw capital inflow to the Ethereum blockchain at its largest to-date since inception. This is most likely due to investors seeking to capitalize on yield-farming opportunities with lucrative returns.
Impressively, over $9 billion flowed into the space in this quarter alone, with Tether (USDT) accounting for nearly two-thirds of the total inflow. Wrapped Bitcoin (WBTC) also grew explosively with nearly $1 billion flowing in.
Towards the end of Q3, capital inflow slowed down slightly due to reduced yield farming returns. However it is likely to continue as long as returns outperform traditional markets.
Uniswap strengthens its dominance of the DEX market as DeFi gains popularity.
In Q3, the DeFi & yield farming hype pushed trading volumes on decentralized exchanges to new highs. Monthly trading volumes for the top 10 DEX saw a 700% increase.
Throughout this period, Uniswap & Curve both remained as the dominant trading avenues, accounting for 80% of the DEX market share.
A new contender, Sushiswap (which is a fork of Uniswap), managed to grab up to 8% of market share in September. It remains to be seen if Sushiswap can continue to innovate.
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