The cryptocurrency market experienced a month of widespread corrections and adjustments, sluggish NFT market activity and more, in the month of May, according to on-chain data released by The Block.
May bearish
In a recent tweet, Lars H., Director of Research at The Block, shed light on the performance of the crypto markets in the past month. The data reveals a mostly corrective phase, characterized by fluctuations in on-chain volumes, stablecoin supply, mining revenue, NFT market activity, and trading volumes across various platforms.
According to the researchers, total on-chain adjusted volume saw a decrease of 5.3%, to a value of $196 billion. Notably, bitcoin (BTC) saw a significant 13.3% drop in chain volume, while ethereum (ETH) saw a modest 3.2% increase.
Adjusted on-chain volume of stablecoins was also lower, down 4.2% to $464.6 billion.
In addition, the outgoing supply of stablecoins shrank by 1.4%, to $122.4 billion. Among them, Tether (USDT) saw its market share rise to 68.2% and generated an all-time high bid of $83.5 billion, while USDC (USDC) saw its market share drop by 22.2%.
In the bitcoin mining space, miners were profitable in the month of May, with revenue increasing 13.7% to $916.6 million. However, the makers of Ethereum faced a drop in revenue, seeing a significant drop of 34.5% to $157.2 million.
In May, a total of 204,576 ETH was burned, which equates to $380.1 million. This continuing deflationary trend has been in effect since January 2023.
The on-chain data also shows that since the implementation of the Ethereum Improvement Proposal 1559 (EIP-1559) in August 2021, 3.36 million ETH worth about $9.76 billion have been burned.
1/13 May summary 🧵
Overall a mostly corrective month.
Total adjusted on-chain volume decreased by 5.3% to $196B (BTC: -13.3%, ETH +3.2%): pic.twitter.com/4ZdzwDr02Q
— Lars (@lars0x) June 1, 2023
Ethereum-based NFT markets experienced a major setback in May, with a 48.7% drop in monthly volume, totaling $652 million. Surprisingly, a relatively new player called Blur managed to overtake OpenSea in market share for the fourth consecutive month. The shift in dominance can mainly be attributed to the BLUR token incentives offered by the platform.
(embed) https://www.youtube.com/watch?v=en3v3Y3cgts (/embed)
Turning to centralized exchanges (CEXs), spot trading volume faced a 23.2% decline, marking its lowest level since November 2020. Notable players in this space include Binance with a dominant market share of 71%, followed by Brian Armstrong’s Coinbase at 8.7%, BTSE up 5.1%, and Kraken up 4.5%.
Grayscale Bitcoin Trust (GBTC) saw its average daily volume drop significantly, dropping 38.2% to $26 million, marking the lowest level since December 2019.
Open interest in Bitcoin futures
Moving on to futures trading, open interest in Bitcoin futures saw a slight increase of 2.9%, while Ethereum futures saw an even larger gain of 5.7%. However, monthly BTC futures volume fell 15.3% to $778.5 billion.
In the regulated futures market, the Chicago Mercantile Exchange (CME) reported an 8.4% drop in open interest on bitcoin futures contracts, which amounted to $1.85 billion. Additionally, average daily volume saw a 30.1% drop to $1.22 billion.
For Ethereum futures, monthly volume decreased by 24.3% to $408 billion, indicating a decline in trading activity for Ethereum futures.
(embed) https://www.youtube.com/watch?v=m453s-ROXy0 (/embed)
In the options market, open interest on BTC options saw a decrease of 10.6%, while ETH options saw a modest increase of 5.6%. However, trading volumes for both BTC and ETH options decreased. Specifically, monthly BTC options volume fell 12% to $16.8 billion, while ETH options volume fell 8.5% to $10.7 billion.
The data provides valuable insights into the performance of the crypto market over the past month, revealing a market that is in a corrective phase, characterized by volatility and adjustments across various metrics.
One notable trend is the drop in on-chain volumes, with BTC seeing a significant drop of 13.3%. This indicates a slowdown in transaction activity on the Bitcoin network during the period under review. Conversely, ETH managed a slight increase of 3.2%, indicating a relatively more resilient performance in terms of on-chain transactions.
Stablecoins, which play an important role in the cryptocurrency ecosystem, have also seen a drop in on-chain volume. The overall supply of stablecoins shrank by 1.4%, indicating that they are trading less within the market.
