Throughout March, the crypto market experienced a significant pullback from the gains seen in February, primarily driven by macroeconomic uncertainties and various policy changes in the United States. Amid this negative market sentiment, several notable developments emerged within the sector, as highlighted by the research arm of the world’s largest cryptocurrency exchange, Binance.
According to a Monthly Market Insights report released by Binance Research, the industry witnessed regulatory progress and growth in select sectors during March, ultimately reinforcing a more optimistic outlook for medium- and long-term development.
Market Fell 4.4% in March
The opening weeks of March were marked by volatility following an executive order signed by United States President Donald Trump to establish a strategic Bitcoin reserve. This event fostered intense fluctuations within the crypto market throughout the month. Coupled with the Federal Reserve’s decision to maintain steady benchmark interest rates for the second consecutive meeting and ongoing tariff tensions, risk appetite diminished considerably, contributing to a 4.4% decline in market value.
In their analysis, the Binance Research team noted a rising trend in the supply of Bitcoin (BTC) held by long-term investors. Additionally, there was a marked increase in Bitcoin adoption following the establishment of a U.S. strategic Bitcoin reserve, with institutional players increasingly purchasing the asset.
This growing adoption is largely attributed to major regulatory advancements by U.S. authorities. For instance, the Office of the Comptroller of the Currency (OCC) recently granted banks the authorization to hold cryptocurrencies. Furthermore, the Guiding and Establishing National Innovation in U.S. Stablecoins (GENIUS) Act is progressing towards creating a clear regulatory framework for stablecoins within the United States.
Losses and Gains
The month of March also showcased significant changes in the decentralized finance (DeFi) sector, particularly with Bitcoin DeFi (BTCFi) experiencing notable growth. A pivotal decision by the U.S. Senate to repeal a rule that would have imposed heavy reporting requirements on DeFi platform operators has generated a more favorable environment for growth.
However, it is worth noting that the total value locked (TVL) in DeFi saw a 1.5% decrease month-on-month (MoM), primarily due to fierce competition and diminishing market shares for prominent platforms such as the decentralized exchange (DEX) Uniswap. Data from Binance Research indicated increased market shares for competing DEXs like PancakeSwap and Raydium.
On a less favorable note, the meme coin sector experienced a downturn, with the market capitalization of major tokens declining substantially. The launch of Official Trump (TRUMP) has led to a significant drop in weekly usage metrics for the meme coin launchpad Pump.fun, affecting volume, token creation, and active wallet counts.
Meanwhile, the non-fungible token (NFT) market reported a 12.4% decline in total sales volume, although the stablecoin market cap rose by 4.4% during the same period.
As these developments unfold, the crypto market remains dynamic, reacting to both regulatory changes and market sentiments. Investors and stakeholders will continue to monitor these trends as the landscape evolves.
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