Following the surprising rally at the start of the year, the cryptocurrency market experienced a diverse range of news and price fluctuations throughout February 2023.
Despite the growth of crypto narratives, regulatory uncertainty and ongoing conflicts among centralized exchanges (CEX) tempered investor optimism on the surface, but DeFi blossomed in several sectors.
This month’s report compiles data from more than 14 reliable sources to provide a concise and informative 12-minute alpha digest. Our analysis aims to help you navigate the current market landscape and prepare for what lies ahead in the coming months.
The cryptocurrency sector opened the month of February at a $1.037T market cap. After a slight consolidation period, the industry got hit with several SEC-related news that sent global Mcap down to $943B.
Eventually, prices started moving upward again, and the total value of all decentralized currencies reached a peak of $1.09T for the month before going once again in a steady downtrend, closing February at $1.027T.
The monthly performance heatmap showed that Bitcoin and Ethereum ended at a slight price increase, making February the second consecutive green month of the year, even if it was at a small margin.
In the January report, we highlighted the emergence of a new crypto narrative — Bitcoin NFTs. Thanks to the increased interest around the Ordinals protocol, Bitcoin saw new ATH in terms of adoption, despite still facing price resistance around the $23–25k levels.
Despite facing resistance at the 200-week moving average, the number of non-zero BTC addresses reached a new ATH, with those having a balance above 0.01BTC reaching 11.6M.
There will never be more than 21M bitcoins.
Bitcoin is also at an all-time high in mining difficulty (43.05 T) and hash rate (325.29 EH/s), showing that the network is more secure than ever.
Even though Bitcoin didn’t thrive in February, it still has a year-to-date performance equal to 10 times that of the USA’s SP500 index.
The research team at Crypto.com have done an excellent job tracking and systematically reviewing the performance of top cryptocurrencies.
Below are screenshots from their February edition, with some One Click Crypto comments from us.
L1s and L2s
Unsurprisingly, Optimism’s OP token surged the most in February (+27.3%), making its 3-month performance +227.6%. Another well-known L2 — Polygon had its MATIC coin grow by +6.5% or +45.9% in the last 3 months.
Arbitrum — the L2 with the largest gain in TVL in February still doesn’t have a native token, so we can only guess how well it would’ve performed. On the L1 side, Tron’s TRX grew by +9.5%, taking its 3-month gains to +30.1%.
Regarding TVL, the Cardano, Cosmos, and Optimism networks all grew by roughly +40%. That’s one L1, one L0, and one L2 — showing a fairly distributed growth across the whole DeFi sector.
The DeFi Sector
Inside the revolutionary sector of decentralized finance, there were few gainers. Lido’s LDO token grew by +36.8% or +203.8% for the last 3-months, thanks to the growing interest in decentralized ETH liquid staking.
Other top performers include yearn’s YFI token at +22.5% and Maker’s MKR at +17.5%. The yield optimizer Convex’s CVX crypto showed modest gains at +11.5% for February and +41.8% in the last 3 months.
According to Crypto.com’s research, the DeFi sector has relatively high Beta risk measurements (3–4 points on some coins), making this investment section of Web3 riskier but with higher potential returns.
Gaming Sector
All the top GameFi tokens grew in the last 3 months, with $ILV pumping by +88.0%, followed by $MANA at +62.9% and $GALA at +61.0%
The beta level in GameFi is still high compared to traditional stocks, but relative to the other DeFi sectors is quite low. The average measurement is slightly above L1s and L2s, giving game tokens a reasonable risk profile.
NFT Coins
The NFT sector has had some exciting performers during February, with $GHST taking one of the first spots at a +43.4% monthly gain while also being one of the least volatile crypto coins in the past year.
According to the list, the most profitable NFT investment would’ve been $FET, which grew by +55.1% in February, and an incredible +598.3% in the last 3 months, while having a Beta measurement of 1.18.
With the launch of Bitcoin’s Ordinals, it is expected that a native NFT coin for the project might appear soon, so it might be worth exploring.
Total Value Locked
The total value locked in DeFi protocols hovered between $47B and $52B in February, while the most dominant chain remained Ethereum — taking 58.8% of the stake.
The second largest network is Tron at 10.48%, followed by BSC at 9.86%. Places 4–6 are distributed between the evolving L2s — Arbitrum, Polygon, and Optimism.
DEX Volume
February 2023 was the second-best month of DEX volume out of the last eight, beating August 2022 by a slight margin of $1.13B.
DEX Volume By Chain
The statistics for DEX volume by individual chain provide some fascinating knowledge on how the market trends are shifting.
While Ethereum accounts for 59.1% of the total volume (almost unchanged in recent months), Arbitrum is now the second largest source of DEX volume at 11.86%, with a growth tendency (yellow area on the chart).
On the other hand, the BSC chain stands at a 10.53% share with the trend of gradually shrinking down, while Solana’s 1.06% stake is almost non-existent.
Leading Protocols By Treasury
One of DefiLlama’s new dashboards provides a decent overview of the treasury stats of leading protocols. Currently, Uniswap V3 has the most immense treasury at $2.65B, with all of it coming from its own token.
BitDAO is second, with a treasury of $2.52B and $1.78B (70.6%) from its own token. Ethereum Name Service (ENS) is the third protocol with a treasury above $1B; almost all come from the $ENS token.
Top Earners
Another relevant financial stat is the total 30-day revenue by protocol. The Uniswap V3 DEX remains first at a monthly revenue of $42.48M, while Lido is second at $38.26M.
The protocols with the most considerable relative 30D revenue change are Venus’s lending platform (+42.20%), Compound’s lending (+34.51%), and Alpaca Finance (+32.66%).
Aura Finance has the biggest growth in TVL from the list at +28.22%, and the yield aggregator is the third from this category to be in the top 14.
Suggested read:
The Rise Of L2s
As highlighted in several previous metrics, the L2 narrative is taking over crypto. The measurement most clearly supports this claim is the growth in TVL of Arbitrum (+49.42%) and Optimism (+31.98%), while the rest of the DeFi space remained stagnant in February.
What is more intriguing is that Arbitrum now has 220 protocols and is on its way to climbing to the 4th spot, having only Ethereum, BSC, and Polygon with more use cases. Optimism became the 7th network to cross 100 protocols on its network, surpassing Solana and Cronos.
Arbitrum’s Top Gainers
Arbitrum’s protocols were one of the hottest crypto narratives in February, and the growth in TVL proves that. Among the use cases with at least $10M in value, ZyberSwap expanded the most with a 1-month change of +2088%, making its TVL sit at $121.33M.
Even Uniswap V3 portion on Arbitrum that had over $100M already grew by +44.31% month-on-month and is now at $157.93M.
Optimism’s Top Gainers
While Sonne Finance takes first place in the Optimism list at +139% TVL growth in February, the net growth of Velodrome is the most impressive at an immense increase of +154.08M in a single month.
There is also an ongoing trend in “Indexes” type of protocols by Toros and dHEDGE, which grew by 70–80% and are sitting above $20M in TVL.
Pools
Uniswap V3’s USDC-WETH (0.05%) remains the pool with the highest 30-day average APY, with at least $100M in TVL. At 38.08% 30d AVG, it is hard to compete with it, but GMX’s GLP pool on the Avalanche network is closing in at 33.20% average APY.
As for the Arbitrum version of the GLP pool, the 30d average APY sits at 27.94% with $502.47M in TVL. Solidly V2’s USDC-USDT pool is the fourth and last in the >$100M category, with an average APY above 20%.
Yield Aggregators
Surprisingly, in February, most yield aggregators stagnated (and even declined) regarding TVL. Two of the gainers at around +22% were Origin Dollar and ACryptoS, while only two protocols have a TVL above $100M — Yearn Finance at $435.34M and Beefy at $358.91M.
Beefy and Autofarm are the protocols with the most supported chains in the top 10 list, with the former having 19 and the latter 18.
Yield Aggregators Revenue
Another (probably incomplete) stat provided by Messari this time is revenue for yield aggregators. In the first place, Convex Finance brought $16.20M in revenue for the month, while Aura Finance netted $2.33M, followed by Yearn with $1.70M for February.
In our weekly newsletter, One Click Crypto covered the top cryptocurrency and DeFi news. Among them, here are the most important ones:
[Feb 1, 2023] Wormhole Wins Vote to Be Uniswap’s Bridge to BNB Chain
[Feb 3, 2023] Russia’s Largest Bank To Introduce a DeFi Platform by May
[Feb 10, 2023] The SEC Is Cracking Down Staking On Centralized Exchanges
[Feb 11, 2023] Shopify Launches Blockchain Suite For Merchants
[Feb 12, 2023] Crypto Firm Paxos Faces SEC Lawsuit Over BUSD Token
[Feb 15, 2023] Curve Stablecoin in the Works as Proposal Vote Starts
[Feb 17, 2023] OpenSea Goes Zero-Fee, Creator Royalties Optional
[Feb 20, 2023] Bitcoin NFT Project Ordinals Reach 150,000 Mints
[Feb 21, 2023] Litecoin Gets Its First NFTs After Bitcoin Ordinals Fork
[Feb 23, 2023] Coinbase Is Building Its Own Ethereum Layer 2
[Feb 23, 2023] Optimism Announces The Superchain
[Feb 27, 2023] Coinbase to Delist BUSD Amid Regulatory Scrutiny
Top Raises
According to DeFiLlama data, in February, the Web3 industry raised $867.55M in funding, with Chain Reaction leading the way at a $70M series C round to support the hardware that will accelerate blockchain and privacy to the next level.
Other notable findings are those of Taurus (a $65M Series B) for digital asset infrastructure and SALT’s $64.4M Series A for crypto-backed loans. One category of investments worth highlighting is that of Web3 gaming, which raised $84.3M in funding in February.
In the market trends section, we briefly overview the leading crypto narratives and trends among institutional investors. By looking at both small and large investors’ sentiments*, we get a complete picture of where the next bull cycle will be most prominent.
(*) The theme of “crypto narratives” became popular on Twitter and is where most publicly available trends begin. While many of these narratives are born due to superior macro movements, they are still more relatable to retail investors. For that reason, tracking institutional inflows is vital.
At One Click Crypto, we strive to provide an objective view of emerging Web3 trends through our research articles or weekly newsletters.
AI Coins
The ChatGPT hype opened the gates for AI crypto coins. Read our November 2022 article to see how we forecasted this trend (13 days before the release of ChatGPT) or our new article on the state of AI tokens.
Bitcoin NFTs
In the January edition, we mentioned the emergence of this innovative crypto sector. One month later, there are over 300k inscribed Ordinals, and the count is growing. Read our latest research on the matter.
The China Narrative
The China narrative has taken over crypto. We are eyeing whether this will be a short-term reaction to unfavorable USA regulation and positive Hong Kong news or become “the new normal.”
Arbitrum: The Explosion of Perps DEXs (GMX, Vella, Ragetrade)
Arbitrum is the most active DeFi chain and continues to absorb more liquidity than any other network. This layer two scaling solution takes advantage of Ethereum’s security assurances and provides hyperspeed Ethereum at a fraction of the cost. Read our take on it here.
L2s
Ethereum Layer 2s remain a prominent topic in 2023 due to the arrival of Shanghai and the sudden increase in tokens and LSDs. If you missed this analysis by DeFi Mochi, now is your chance to get up-to-date.
DeFi Liquidity Optimization
Liquidity optimization is crucial in the DeFi world as it allows for smoother and more efficient user transactions. The narrative is already in motion, and we’ve provided a high-level analysis of the evolution of liquidity optimization from TradeFi to DeFi.
ZK-Rollups
A theme that gained pace in mid-2022 is ZK-rollups like Starknet and zkSync. Some of these projects still don’t have native tokens, and crypto analysts are lurking for opportunities. Here is a breakdown of the narrative by Miles Deutscher (shared last month as well, but still relevant):
Decentralized Stablecoins
As the FUD around centralized stablecoins like BUSD increases, people are looking back at decentralized options, but the pain of Terra’s UST remains. Below is a comprehensive analysis of the bullish use case for DeFi stablecoins by Ignas.
Smart Money Tracking
Here is where retail and institutional investing blend. Tracking the smart money movement has been a well-known investment tactic for quite some time but is now gaining traction again on Crypto Twitter.
The next section will give our take on the macro level of smart money movements based on CoinShares’ recent weekly report.
On average, the institutional inflows declined by -$6.8M in February, but for the year-to-date metric, it is at a net positive of +$189M. The biggest influx for February came from 3iQ at +$10.5M. The total AUM for decentralized currency funds is $29.80B, according to CoinShares’ data.
Bitcoin saw the largest inflow of capital since the start of the year at +$146M but lost -$16.8M in February, while Short Bitcoin investments grew by +$14M. Switzerland saw the highest inflow of capital (+$12.6M) in February, most of which came in the last week of the month.
In late 2022, One Click Crypto decided to focus on DeFi instead of centralized solutions. And it is for a reason.
Decentralized Finance (or DeFi) enables developers to build more comprehensive financial products than they could do by relying only on 3rd party custodians like Binance or FTX. DeFi is currently at the forefront of innovation in both blockchain and finance.
Given the massive number of investment options in DeFi, picking the right opportunities is a challenge. One Click aims to solve this by aggregating and personalizing the DeFi experience. With a 2023 product vision, One Click will release a unique suite of AI-powered web3 products allowing you to earn passive yield through DeFi pools and manage portfolios most effectively and risk-awarely.
What does it mean for you?
1) Join us on the DeFi journey
You can join us on an exciting journey into DeFi by joining our Discord server and connecting with the like-minded community of crypto enthusiasts, traders, and farmers.
2) Earn rewards and participate in giveaways
You can earn rewards in OBT and 1CC tokens by joining the One Click giveaway programs. You can follow the most up-to-date information about the reward programs on our Discord server.
3) Get early access to a new DeFi product
Become one of the early testers of One Click Crypto DeFi robo-advisor and earn extra rewards by filling out the waitlist form.
Take a peak at what we’re building.
One Click Crypto’s robo-advisory app will allow you to generate a personalized DeFi portfolio tailored to your risk preferences from hundreds of existing DeFi yield protocols like Curve, Aave, or GMX, all through your Metamask wallet.
With the upcoming 1CC launch, the OBT token reaches more demand from holders, with its price rising by more than +200% over the last month.
Recently, One Click Crypto announced an OBT token buyback program and will purchase OBT from PancakeSwap over the next 4 months.
OBT token also serves higher utility in our trading bot app, with more and more customers subscribing to paid pay-as-you-go plans. With another product update coming in March, it is very likely that the OBT utilization inside the app will increase even higher.
We are happy to announce that premium subscriptions are now available in OBT! The OBT subscription price is calculated based on the Linearly Weighted Moving Average (LWMA) of OBT’s price for the last 4 days in 8h intervals. (12 data points) It is subject to change on a month-to-month basis based on the price of OBT.
We are also sunsetting FIAT-based subscriptions at the One Click Crypto trading bot application.
We are introducing a new type of premium subscription — Experimenter — suitable for those who want to test run the One Click trading bots.
The plan costs only $7.99/month and allows the creation of a portfolio of up to $1,200 in bots.
We started conducting weekly competitions on the One Click Crypto Discord server to grow our community further.
We already had our first batch of winners announced recently:
And there are more exciting competitions to come. Join the One Click Crypto Hub now and participate.
Following our successful world tour on Blockchain events from 2022, we’ve opened this year by attending one of the most interactive events in South East Asia — The 2023 Blockchain Fest in Singapore between Feb 16 — Feb 17.
In February, we conducted the following research:
The Rise Of DeFi Robo-Advisors
Here we introduced investors to this innovation that is already responsible for billions of dollars in AUM in traditional finance.
Furthermore, we conducted three 101 articles on the most critical aspects of DeFi investing, crypto yields, and liquidity optimization.
We also went in-depth on two of the hottest crypto narratives currently — AI coins and Bitcoin NFTs.
And most recently, we began a series on crypto asset management for DeFi protocols and, more specifically DeFi yield aggregators.
More research:
9 Hidden Web3 Trends To Watch In 2023
7 Ways To Invest In Artificial Intelligence
The Greatest Cryptocurrency Trades and Their Success Stories
Top 7 Artificial Intelligence Investments For The 2023 Recession
AI Crypto Trading Bot With 100% Accuracy
Top 5 Crypto Trading Bots For December 2022: Performance Review
Can AI Trading Bot Beat ETH By +0.23% Daily?
AI Trading Bot: Understanding Its Behavior And Decision-Making Patterns
15 Crypto Funds 2021–2022 Performance
How Computers Became Better Wealth Managers Than Humans
Will Regulations Kill Decentralized Finance Or Save It?
World’s Richest Gamblers (Investors) — Making Billions With Mathematics
How Did AI Respond To The Terra (LUNA) Meltdown?
While not a news outlet, One Click Crypto informs our users by aggregating the essential DeFi and macroeconomic news in its weekly newsletter emails and YouTube videos.
We are also stepping up our video content with weekly AI crypto trading updates (we were already doing them) and the new DeFi weekly series. We are also experimenting with YT Shorts, so if you want our take on something, comment on the most recent video.
Everything is in its own bubble.
Previous monthly reports have primarily focused on macroeconomic conditions and trends in Bitcoin and Ethereum. However, it is now apparent that the DeFi sector is becoming increasingly decoupled from these broader market movements and is developing more autonomously and distinctly (in its own bubble).
In recent months, investment success has been strongly linked to participation in evolving crypto narratives, which has become a key consideration for many analysts seeking the next “crypto gems.”
Regulatory uncertainty and external threats continue to pose significant challenges for the Web3 industry. Still, the community is beginning to unite in pursuit of a decentralized governance model that could enable a truly autonomous financial system.
Get early access to the upcoming One Click DeFi app — a personal AI Robo-advisor with exposure to 1000+ yield protocols, personalized to your custom investment profile and risk appetite.
Disclaimer: This report is not intended to serve as financial advice. The sole objective is to provide an educational perspective on the current state of Web3 and to identify trends that are gaining momentum. Investing in products, tokens, or company shares associated with these trends will not necessarily result in financial gain. Always conduct your own research and seek the advice of a financial professional.
We regularly prepare insightful reports and case studies about crypto trading and the blockchain industry.
We sent you a link to complete your sign-up.
Check your inbox, verify your email, and unlock all functionalities of your OB Trader account.
.png){kind=logo}
You were added to our waitlist. You will get an email within 3-5 days If you are shortlisted.
.svg)
