TL;DR
- Total cryptocurrency market capitalization fell 1.0% in Q3 2024, ending at $2.33 trillion.
- Bitcoin increased its dominance to 53.6% of the total market, despite a slight increase in its price of 0.8%.
- Prediction markets grew by 565.4%, driven by bets on the US elections.
The third quarter of 2024 has been a period of notable volatility for the cryptocurrency market, culminating in total market capitalization standing at $2.33 trillion, a decrease of 1.0% from the previous quarter.
During this period, the market showed fluctuating behavior, reaching a high of $2.61 trillion in July, but falling significantly in early August due to weakness in the global economy.
The US Federal Reserve opted to keep interest rates stable in July, but subsequently decided to cut them by 50 basis points in September.
This decision, together with the unexpected rate hike by the Bank of Japan, had a considerable impact on the market.
Despite this downward trend, Bitcoin managed to increase its market dominance, reaching 53.6%.
This 2.7% increase in market share is remarkable, especially considering that its price only rose 0.8% in the same period.
The main driver for this dominance came from the declining share of other major cryptocurrencies, such as Ethereum, which suffered a 3.6% drop in dominance.
Despite the launch of Ethereum ETFs in July, interest in its ecosystem appears to have waned, contributing to its pullback, according to CoinGecko’s latest report.
In terms of performance, Bitcoin was outperformed by several asset classes, with gold being the standout, up an impressive 13.8%.
The increase came amid growing concerns about a possible economic slowdown in the US and tensions in the Middle East.
The Japanese yen also performed strongly, appreciating by 12.0%, driven by the Bank of Japan‘s monetary policy decisions.
In contrast, crude oil and the US dollar index failed to outperform Bitcoin.
The rise of Crypto prediction markets
One of the most interesting phenomena of this quarter was the explosive growth of prediction markets, which increased by 565.4% thanks to bets related to the US presidential elections.
Polymarket dominated this sector, capturing an overwhelming 99% of total volume in September, with bets reaching $1.7 billion, accounting for almost half of its annual volume.
This boom reflects the growing interest of users in prediction platforms and their usefulness in the current political context.
Transactions on Ethereum scaling solutions (Layer 2) also showed significant growth of 17.2%, suggesting an increase in activity and usage of these networks compared to the Ethereum mainchain.
Among the major Layer 2 solutions, Base stood out as the most active, capturing 42.5% of all transactions in the third quarter.
Finally, spot trading volume on centralized exchanges experienced a 14.8% drop, reflecting a downward trend in trading activity.
Binance, while still the largest exchange, saw its market share drop below 40% for the first time since 2022.
This outlook indicates that, despite recovery in certain segments, the cryptocurrency market continues to face challenges in an uncertain global economic environment.
The third quarter of 2024 has presented a complex scenario for the cryptocurrency market, marked by volatility and adaptation to significant changes in global economic policy.
