Stablecoin market nears pre-TerraUSD crash levels: Binance Research

The crypto market has continued pushing higher in the first half of 2024, building on the gains made in 2023. The total market cap now stands at around $2.27 trillion—a solid 37.3% growth year-to-date.

From a numbers standpoint, most of these gains were packed into the first quarter with a massive 60.2% increase. The second quarter was a bit rougher, with the market giving back some gains and dropping by 14.3%.

Comparing the performance to traditional assets, Bitcoin and Ethereum have been the top performers, with returns of 48% and 43%, respectively, year-to-date. 

"Bitcoin’s potential diversification benefits and strong performance compared to a purely traditional finance portfolio are evident," Binance Research analysts pointed out in their H1 report.

Layer-1s (L1s) started the year strong. Bitcoin continued to gain market dominance following its fourth Halving, the launch of the Runes Protocol, and the approval of U.S. spot ETFs, which have pulled in over $14 billion so far. Ethereum saw a boom in restaking and the EIP-4844 update. 

Moreover, BNB Chain kept working on opBNB and Greenfield, and Solana shined in the memecoin space and launched blockchain links (blinks).

"The first half of 2024 was all about airdrops in the Layer-2 (L2) world, especially for zero-knowledge (zk) projects," Binance Research highlighted. These incentives brought in large capital inflows, pushing the total value locked (TVL) in L2s to $43 billion—a 90% jump in just six months.

DeFi saw a huge influx of capital, driving the TVL up 72.8% year-to-date to $94.1 billion, from $54.4 billion at the start of the year. This boost has benefited nearly every DeFi sector, leading to the rise of protocols making previously inaccessible financial tools available on-chain.

The stablecoins market has made a notable comeback, now just 14.5% below its peak in April 2022, before the TerraUSD (UST) crash. As of June 30, 2024, the stablecoins market cap was $161 billion, a two-year high. 

Tether’s USDT still leads, but Circle’s USDC and Ethena’s USDe have been gaining ground. "The stablecoins market is recovering impressively, reaching levels we haven't seen since before the TerraUSD crash," noted Binance Research.

Elsewhere, NFT markets had a turbulent first half, with sales volumes dropping and major projects seeing floor prices fall by more than 50%. Blur maintained its dominance, boosted by the Blast token airdrop, while Pudgy Penguins found some success with their physical toys. Bitcoin NFTs also continued to do well.

Web3 gaming had a strong Q1, but Q2 saw gaming tokens drop in market cap along with the rest of the altcoin market. 

Despite falling prices, user growth metrics were better than ever, with projects like Pixels and Hamster Kombat attracting large numbers of players with the promise of token airdrops. "User growth in Web3 gaming remains strong, even as token prices fluctuate," said Binance Research.

“Looking ahead to the second half of 2024, six key themes are particularly exciting, and we expect to see significant progress in these areas throughout the year. These themes cover various narratives and sectors, including the macro environment, Bitcoin ecosystem, ownership economy applications, and real-world assets (RWAs),” the half-year report concludes.