Market Analysis Report (21 Apr 2022)

Throughout the first quarter of 2022 major crypto assets failed to seize the momentum seen in 2021. As a result, the total crypto market capitalization fell 5.37% to $2.09tn.

These movements were mainly driven by the uncertain macroeconomic conditions during the quarter, including Russia’s invasion of Ukraine and surging inflation rates which are rising at the fastest pace since 1982.

These events have also seen the spotlight land on cryptocurrencies. Over the past few months, crypto donations have poured into Ukraine and many have questioned the use of crypto by Russian oligarchs. Unsurprisingly, this has led to calls for more regulatory clarity on the asset class with the Biden administration announcing an executive order to ‘ensure responsible development of digital assets.

The Ruble has seen significant declines since President Biden announced the first tranche of sanctions on Russia, seeing a 10.7% depreciation against the US Dollar throughout the first quarter.

Ruble-denominated crypto trading volumes have jumped as a result, despite some exchanges imposing restrictions.

Meanwhile the DeFi landscape has shifted in the most recent quarter following an impressive surge in activity for DeFi protocols during 2021. Ethereum has maintained dominance (now at 55.6%), despite stagnant growth with a current TVL of $150bn (down 20.8% from the end of 2021,Q4).

This stagnation can be attributed in part to the weak performance of crypto assets during the quarter, but also to the fierce competition among alternative layer-1 protocols.

Find out more via CryptoCompare’s 2022: Outlook report.