Crypto Market Report - November 2022

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7 December 2022
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7 December 2022

When looking at the worst months of this ongoing crypto winter, November might have taken one of the top steps on that list. This can be clearly seen looking at the Top 30 cryptocurrencies by market capitalization, with just a few tokens such as Dogecoin and Litecoin showing positive gains throughout the months. While Bitcoin has broken one of the support levels for the first time in 200 weeks, Ethereum is still in a gray area as we still don’t know Merge's full effect on the network's future. The token that surprised us the most was probably Dogecoin, which following a successful month of October fell victim to FTX collapse, and lost quite a bit of value. But despite that, Dogecoin started its recovery and has been showing an increase in prices after the collapse. Now let’s take a look at exactly what happened to the crypto market in the month of November and what are the takeaways from this month.

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Top 5 Best and Worst Performing Tokens

Now mentioning the Top 5 losers of the month should not be a problem, but mentioning the top 5 gainers is straightforward impossible, as only 4 tokens went positive in the past 30 days. This should be a clear indication of how bad of a month it was for the whole crypto in general, and the consequences of this crash are yet to be seen. Now let’s take a look at these tokens in more detail.

Top 4 Best Performing Tokens

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As we mentioned, there were only tokens that have gained in value in the past 30 days. But there were also a few other tokens such as BNB, which had lost around 1% of their value in the past 30 days, and considering that the market is in a volatile state this could easily be +1% in just a few days. 

When it comes to tokens that actually gained significantly in the past 30 days, these are Litecoin and OKB. Litecoin has maintained a constant $50 - $60 value in the past few months, but during November it broke this range and jumped all the way to $72 and has had a gain of %31.9 in the past 30 days. This can be attributed to multiple factors, such as MoneyGram announcing that it will allow users to store Litecoin in their wallets, as well as the upcoming Litecoin halving. Historically, Litecoin has shown bullish runs before Halving occurred, such an example can be seen in 2019 when Litecoin rebounded after a huge downfall and regained some portion of its previous high just before halving. Now the question remains whether it will maintain this momentum, or will slow down. Some experts suggest that Litecoin is aiming at $100, while others suggest that it will return to its average of $60 by the end of the year. 

Another token that has seen a positive month of November is the native token of the OKX exchange, OKB which in the past 30 days gained 26.7%. The fact that one of the best-performing tokens is coming from a crypto exchange is surprising considering what happened with FTX earlier this month. But there are reasons for this happening and they are quite interesting. First of all, OKX opened a new regional hub in the Bahamas and registered as Digital Assets Business. This makes the Bahamas the second regulatory body to regulate OKX after Malta, giving it more credibility. This happened right around when the FTX collapse was happening, and a significant number of traders who left FTX saw OKX as a good destination to move, increasing the value of the token further. All in all, this is one of the fastest-growing exchanges, and the fact that their token saw a positive month of November should not be that surprising if we look at every fact.

Dogecoin is another token that has managed to impress us this month. While it has lost a bit of value since November 1 it still maintains around 15% gains since October. November saw Dogecoin hit one of its highest values in the past 6 months, and while prices have come down since this huge jump as a result of the FTX collapse, it managed to rebound, and currently, it is in an uptrend, 

The 4th token that has managed to gain value in the past 30 days is The Open Network or TON for short. This is a token that operates on its own layer-1 blockchain, with really fast transaction speed and very low fees. It was founded by Telegram, which is one of the biggest messenger apps in the world. The reason as to why it has grown in value can be associated with different announcements and developments Telegram has announced this month. But this gain in value is not significant and at the time of writing this report, it has had a +2.6% gain in value in the past 30 days, meaning that it can easily be in negatives in just a few days, as the market is currently in a really volatile state. 

Top 5 Worst Performing Tokens

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When it comes to wors performing tokens inside the top 30, except the aforementioned tokens and stablecoins, every other token has had a bad 30 days, with most tokens losing significant value, while others maintained somewhat maintained their value, with losses of just around 1-2%.

The worst-performing of them all is Solana, which has managed to lose almost 60% of its value in the past 30 days. This year has not been good for Solana in general, as it dropped significantly at the start of the year, when it was trading for around $40-50, after having been valued over $200 months prior. But this was not surprising as almost every token lost significantly at the start of 2022, what dealt Solana its latest blow was the collapse of FTX and Ethereums successful Merge. FTX collapse had an immediate effect on Solana as prices started to fall, it came in combination with Ethereums Merge, which removed most of the advantages Solana had over Ethereum. Currently, Solana trades for around $13, and after being inside the Top 10 cryptos for a very long time, it has now fallen all the way down to the 17th spot.

Another token that has lost big this month is Algorand, the token that many of you have probably never heard of and just barely made inside the top 30 tokens, taking the 30th spot. The fall of Algorand is associated with its sponsorship with FIFA. It has close ties with FIFA World Cup, and will even be one of the main sponsors of the Women's FIFA World Cup in 2023. This fall can be associated with investors taking out profits they have made, or people wishing to remove their investment following huge scandals that have been taking place in Qatar while hosting this ongoing World Cup. This downfall and outflow of investors left Algorand with a loss in value of just under 30%.

Other tokens inside the Top 5 worst performing this past month are Avalanche, Cosmos Hub, and Ethereum. Avalanche and Cosmos have been going through a bad year altogether and the recent FTX collapse made things even worse for them. While Ethereum has been surrounded by uncertainty following its Merge in mid-September, resulting in the token having up and down periods.

Crypto Market Cap

When it comes to the whole crypto market in general, the last 30 days have not been the best, and in fact, it has been one of the worst 30-day periods ever since the market crashed in early 2022. Just 30 days ago, the whole market capitalization of cryptocurrencies was just under $994 billion, and currently, this number is $818.5 billion, meaning that in the span of just 30 days, cryptocurrencies managed to lose around $175.5 billion. This huge fall is mostly due to FTX announcing bankruptcy in mid-November, where the crypto market cap fell as low as $786 billion. Compared to the start of the year, the current market cap is down by an astonishing $1.4 trillion.

If we take a look at the crypto market capitalization without taking Bitcoin into account, things become even worse. Just 30 days ago, the crypto market cap, excluding Bitcoin, was $600 billion, and currently, it sits at around $507 billion. This means that Altcoins have managed to lose around $193 billion in the past 30 days. This number was even higher at the time of FTX's collapse as the market fell to around $484 billion in mid-November.

FTX Collapse Throws Another Major Blow To Already Weak Crypto Market

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The month of November was defined by the collapse of the second-largest crypto exchange FTX. If you have to be living under a rock if you at least have not heard of what has been going with FTX and its founder and now ex-CEO Sam Bankman-Fried. But if you have not, let’s go take a quick look at what exactly happened and caused one of the biggest crypto crashes in the past few years. 

On November 2, 2022, CoinDesk made a report where they took a look at FTX and its sister company Alamada Research, an investment firm, which is also owned by Bankman. Following their investigation, CoinDesk found that $14.6 billion worth of assets that were held by Alamada Research mostly consisted of FTT, a native token of FTX, with a total of around $6 billion. At first, this might not seem too concerning, but considering that the whole investment firm was dependent on the cryptocurrency created by its sister company has raised big concerns from people who had investments in Alameda and FTX. Further investigation showed that Alamada was in big financial trouble, having $8 billion in liabilities, the majority of which was locked-FTT. This news raised concerns and a big number of people started to withdraw their funds from FTX and started selling their FTT tokens, with fears of collapse. This panic showed another skeleton in the FTXs closet, which was the lack of liquidity. 

During this time, the giant of the crypto industry, Binance tried to step in and announced that they have made a verbal agreement with FTX, and they will be acquiring the exchange. But once Binance took a look at FTX's books, they swiftly backed off from the deal, leaving FTX no other choice other than announcing bankruptcy. This caused the whole collapse of the crypto market, as this bankruptcy was not for just FTX, but more than 100 other companies owned by Bankman. This also did a massive blow to other companies that had partnerships with FTX, or those that stored most of their assets on this exchange. This caused FTT to lose almost all of its value, as it fell from $25 value all the way to $1.5. FTX collapse also had a major impact on Solana tokens, as FTX held a large quantity of Solana tokens. 

Ever since then, Sam Bankman-Fried has stepped down as the CEO of FTX and is currently under the investigation by Securities and Exchange Commission as well as Justice Department. This also halted operations for other major companies such as BlockFi and Genesis Global Capital, which all had their assets stored on FTX, but now are unable to withdraw them.

The full effect of this collapse is yet to be seen, and different works have started to ensure that something like this never happens again. CoinMarketCap even introduced icons next to crypto exchanges that have publicly available and verifiable reserves, showing how much liquidity the exchange has.

Crypto Market by Classification

What is interesting about the crypto market is that the tokens available are associated with different fields in connection with blockchain. This means that if one sector fails, it does not mean that the second one has to fail as well. We also have different networks, which might have different developments and advances. Now let’s take a look at some of the interesting and different sectors of the crypto market.

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DeFi takes a big hit but is on a rebound

One of the biggest blows that was dealt by FTX collapse, was to the DeFi ecosystem. With a big number of projects having their assets stored on FTX, the DeFi ecosystem took a big hit. This was made worse by an increase in withdrawals and sales of tokens by people who were scared by the FTX collapse. Taking a look at some of the leading DeFi tokens such as Avalanche, Chainlink, Uniswap, and Tezos among others, we can clearly see that every token took a nose dive once FTX collapsed. This raised big concerns for these projects and people were unsure if they would be able to survive but looking at the performance of these tokens in the last week, we can say that the worst might be behind. Most tokens started to gain value once again, and most of them show greens all across last week. But this does not mean that DeFi has fully survived this crisis, as despite gaining value, most tokens are still far from where they used to be just 30 days ago. 

Taking a look at the market capitalization of the DeFi sector, we can clearly see the impact this had on DeFi tokens. At the start of the month, the market capitalization of the DeFi sector was around $47 billion and hit a peak of just over $49 billion at the beginning of the month. This was followed by a quick collapse and the market cap fell all the way down to $35 billion. But as we mentioned above, DeFi is on a recovery path and currently has a market capitalization of $38.5 billion.

Solana ecosystem collapses

While saying that Solana collapsed might be harsh, considering that it had a $77 billion market capitalization, taking a closer look reveals the bigger picture. Most of Solanas's market cap is taken up by Tethers stablecoin USDT, which currently has around $65 billion market cap and operates across multiple networks. Considering that FTX had major investments in Solana, it should not be surprising that this ecosystem is the one that suffered the most.

Solana token itself lost around 58% of its market capitalization this month. Just before FTX collapsed, Solana was trading for around $35, which in itself is low considering how much this token was worth at the start of the year. But currently, Solana trades for just $13 and has a market cap just shy of $5 billion, which is significantly lower than the $13 billion market cap it had at the start of the month. Other tokens operating on the Solana network, such as Chainlink, Graph, Arweave, and others also took a big hit. But things don’t look that bad for Solana, as it has managed to start its recovery path and prices are slowly rising once again, but still remain low compared to what they used to be.

Ethereum remains in a gray area

Following a successful Merge, Ethereum has moved to a proof-of-stake protocol just a few months ago. At first, this had a negative impact on the token and the whole ecosystem in general, but ever since then it has started to recover and things don’t look at bad as they used to. 

Ether and other tokens in the Ethereum network took a blow from FTX collapse, just like almost every other token. Ethereum itself was trading for around $1500 before falling down to $1100. This can be considered a big blow by itself, but if we consider the state in which Ethereum is currently, this can be an even bigger problem. Following a Merge, Ethereum prices dropped and but then soon after it picked up momentum and started a recovery. But this market crash halted this recovery process and dropped Ethereum back down to what it was when prices dropped after the Merge. Ever since then prices of Ethereum and other tokens operating on this network have been going up and down, showing consistent volatility, with no apparent trend. 

Being the largest blockchain in the world and the second largest crypto, people are obviously curious as to what awaits Ethereum. This question was hard to answer prior to this market crash and was made even harder following these events. We will most likely learn about Ethereum's future once Ethereum allows withdrawals of the staked Ether, somewhere this year. Currently, the Ethereum ecosystem has a market capitalization of $377 billion, but a third of this is taken up by stablecoins such as USDT, USDC, and BUSD, which also operate on other networks as well.

What happened in the Exchange industry?

The collapse of the FTX has sent shockwaves across different crypto exchanges, with people being wary of some exchanges being in the same boat as FTX and covering that fact. This even gave CoinMarketCap a reason to introduce a new function to the platform where they identify exchanges that have verifiable assets for liquidity purposes. Now let’s take a look at some exchanges and how they performed this month.

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Binance remains at the top

Binance is still the number one crypto exchange in the world by miles, and we don’t see it changing any time soon. This recent FTX collapse might have been seen as negative, but for Binance it could have been a positive occurrence. With most traders fleeing FTX, a big number of these traders chose Binance as their new destination. This was the combination of Binance’s strong reputation and some shady activities of other smaller exchanges. FTX collapse showed people that just being one of the top exchanges does not mean it's a safe to place to trade. This left many traders skeptical of some other exchanges such as Crypto.com, Kraken, KuCoin, and many others. On the other hand, Binance has been transparent about its activities, even instantly providing proof of its asset holding.

This might be good for the long run, but right now Binance is feeling the effects of this market crash. During prior months, Binance had an average 24-hour trading volume of around 15-16 billion dollars, this jumped to 35-40 billion during the FTX collapse as people flooded the market, and ever since then, Binance has around $10-11 billion daily trading volumes.

Crypto.com proves doubters wrong

When the FTX collapsed, the exchange which came under fire the most was Crypto.com. There were allegations thrown towards the exchange, saying that they were in the same state as FTX and had a liquidity crisis. Crypto.com soon after made multiple announcements stating that they were not in such a state and exchange had sufficient reserves and no liquidity crisis. This was then confirmed by CoinMarketCap, which started to indicate which exchange has verifiable reserves and how much money is in these reserves.

Before everything this happened, Crypto.com had average daily trading volumes of around $250 million. This then spiked while the whole FTX scandal was getting uncovered, as people flooded the exchange in order to withdraw their holding from Crypto.com. But ever since then things have stabilized and currently Crypto.com has an average daily trading volume of $200 million, which is lower than it used to be, but not by much. All in all, Crypto.com somewhat managed to prove that it has funds to back up its operations and as things stand they have almost $4 billion worth of assets across different wallets.

OKX suffers a mass drop in daily trading volumes

OKX is another crypto exchange that has amassed a large number of traders on its platform in a relatively short period of time. This is the exchange that has managed to maintain $3-4 billion daily trading volumes for the past year, but the recent FTX collapse also had an effect on this exchange. 

Just before the news of FTX became public, OKX had daily trading volumes of around $2 billion at the start of November, before jumping to $5 billion once this news came out. Just like many other exchanges, OKX trading volumes dropped soon after, but this drop has been more significant than most other exchanges. Currently, OKX has an average daily trading volume of $700 million, meaning that for the first time in over the year, the exchange constantly sees trading volumes of less than a billion. But considering that a big number of traders exited the market altogether or moved to more established and trustworthy exchanges such as Binance, it should be not surprising that OKX training volumes are down. What’s interesting here is that the OKB token, which is the native token of OKX, has seen big growth this month, and is part of a handful of tokens that had a positive month in November. The question that remains right now, is whether will OKX be able to return to its previous trading volume or whether it will retain this position and slow down its fast growth.