Huobi Research: why the crypto market is very much alive and when to expect the bottom

Huobi Research last week released its annual “Global Crypto Industry Overview and Trends 2022-2023” report. This report summarizes 2022 and also makes some cautious predictions for 2023. We selected the most important highlights of this report; in particular, it turns out that the NFT market was the most active and growing in 2022.

 

Report overview

In this new report (full report, digest), analysts from Huobi note that all investments in the crypto market exceeded $27.7 billion in 2022, while the total market capitalization of crypto assets declined by more than $2.2 trillion. 

The authors of the study analyzed the five most popular search queries related to the Web3 industry. Queries related to NFT dominated — according to Huobi experts, this was because collectible tokens can be well integrated with a variety of industries like sports, entertainment and art. The center of NFT activity right now is Asia, where there has been the greatest demand and growth in this area. For a variety of reasons, the NFT market is recognized in the report as the most active and promising at the end of 2022.

The second most active segment, according to the report, is meta-universes and GameFi — they also grew significantly in 2022 despite the crypto winter. Investments in them have also grown: investments in these two sectors of the crypto industry increased from $874 million in 2021 to $2.4 billion in 2022 — more than 300%.

The next part of the report focuses on activity on cryptocurrency exchanges. Analysts say that the U.S. leads in CEX usage. Almost 10% of all CEX traffic comes from the USA, followed by South Korea (7.4%), Russia (6.1%), Turkey (5.6%) and Japan (3.8%). 

The U.S. has also been a leader in the crypto industry — Huobi evaluated the DeFi volume share, CEX volume share, percentage of cryptocurrency users and the internet user index of the population. U.S. citizens lead in both investment and the number of active users (audience) of services and crypto wallets.

The future of crypto

As for predictions, let’s partially list them (see the full version in the report):

• The market will reach the bottom in early 2023;
• Social tycoons in Web2, such as Twitter, will continue to pursue Web3, introducing a new paradigm of SocialFi;
• Ecological prosperity for Layer-2 will happen in 2023;
• The Dapp chain will usher in a period of rapid growth;
• On-chain regulation will be strengthened and some protocols may be endangered;
• Cryptocurrencies will be adopted as payment or authorized as fiat currency by more countries.