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Half-Year Report 2022

Crypto Market Review
Binance Research (Stefan Piech; Jie Xuan Chua, CFA; Shivam Sharma)

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  • The first half of 2022 proved to be a challenging period for investing in risk assets. Crypto was not spared from the market downturn that also affected traditional asset classes such as stocks and bonds.

  • Nonetheless, continued developments and innovation in the crypto ecosystem contribute to our optimistic view of the future of crypto.

  • The competition between L1s remains fierce. Different L1s have taken different approaches towards increasing scalability.

  • L2 deployment appears on track to become increasingly ubiquitous going into the second half of the year. It would not be surprising to see most, if not all, of the top ranked dApps being deployed on some form of L2.

  • Dominance of Ethereum in DeFi has continued to decline, as other chains such as the BNB Chain catch up. Development in the space remains strong and fundraising in DeFi has hit an all-time high.

  • Trading volume for NFTs in the first half of 2022 remained resilient despite a sharp decline in June. OpenSea is still the leading NFT marketplace but new entrants such as X2Y2 and Magic Eden have introduced strong competition. The shift to using NFT aggregators is likely to continue gaining ground, albeit slowly.

  • The number of GameFi projects has continued to rise but there are signs of slowing growth. Deal flows are healthy and capital investments in GameFi exceeded over US$4.1B in first-half 2022.

  • In terms of returns, the large-cap, blue-chip L1 coins have performed relatively well even amidst market volatility. L1 and Gaming tokens have exhibited some level of resilience and performed better when compared to DeFi and DEXes tokens.

  • Cryptocurrencies would likely benefit from a globally coordinated approach to regulation. Working with regulators rather than against them is probably a good approach.

  • In the first half of 2022, there were more than 1,000 investments within the crypto space. The two areas that saw the most number of investments were Gaming/Entertainment and Asset Management.

About Binance Research: Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent, and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes.

General Disclosure: This material is prepared by Binance Research and is not intended to be relied upon as a forecast or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, cryptocurrencies or to adopt any investment strategy. The opinions expressed are as of the date shown above and are the opinions of the writer, they may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Binance Research to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Binance. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, cryptocurrencies or any investment strategy nor shall any securities or cryptocurrency be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Investment involves risks.