Binance Research underlined key trends the crypto market should follow this December as NFT, DeFi and Web3 developments happened in the last month along with Bitcoin rallying to the $100K mark and an altcoins season approaching.
Spot ETF inflows continue to rise
Earlier last month the crypto market reached new heights with a record $3.47 trillion market capitalization which was fueled by Bitcoin rallying to cross the $100,000 mark.
This major milestone was possible because of an unprecedented surge in institutional participation in the market as seen by the 7-week consecutive growth of spot ETF inflows which crossed $6.5 billion in November. Most of it can be attributed to the November 7 Federal rate cut to 4.5%-4.75% which strengthened the market's confidence on risky digital assets along with the stimulus from ex-SEC Chair Gary Gensler's resignation announcement.
This sparked enthusiasm about regulatory reforms that would favour digital currencies. And now that we have entered the December month, the market was upbeat over Trump picking pro-crypto Paul Atkins as the new SEC Chair.
As Bitcoin and Ethereum spot ETFs drove net inflows to over $30 billion and $577 million, respectively, firms like BlackRock and Grayscale emerged as the top gainers, which showcased the institutional appetite for crypto.
Altcoins surging
Bitcoin hovering around the 100K mark and finally crossing it, also caused a resurgence in altcoins like XRP and Cardano which rallied to new heights. The Altcoin Season Index climbed to 70 from 27 in the last month with the market cap of the altcoins hitting $470 billion.
Meanwhile, Solana flipped Ethereum in daily fees as its DEX activity went beyond $120 billion. However, the meme coin trading frenzy faced some setbacks due to controversy.
Ethereum also reclaimed its lead in stablecoin liquidity by overtaking Tron with a 31.4% spike in its USDT supply, which touched $61.8 billion.
XRP experienced a 362.3% surge in price after Gensler's resignation announcement, making it a leader in the altcoin market. This was further fuelled by WisdomTree filing for XRP exchange-traded product (ETP).
Cardano came a close second with a 216% monthly gain as Glacier airdropped the NIGHT token, allocating it to ADA holders. Meanwhile, Cardano partnered with BitcoinOS to leverage Bitcoin's liquidity over Charles Hoskinson's meeting with Trump.
Ethereum also experienced a modest 45.1% gain as institutional inflows grew because of federal rate cuts and an increase in Layer-2 adoption. Bitcoin saw a 36.9% surge driven by ETF inflows which has a $1.8B weekly average.
TON, TRX and BNB gained 33.3%, 24.7% and 10.8% respectively over platform-specific developments and regulatory optimism. The BNB rally has been linked to BNB Greenfield’s success as it drew major crypto projects like Limewire.
Meme Coins Surge over Musk-news
Of the meme coins, Dogecoin gained the maximum, 160.4%, due to Elon Musk being part of the "Department of Government Efficiency" (D.O.G.E.) under the Trump administration, adding to speculations about integration into social media platforms.
Shiba Inu came a close second with a 70.7% monthly surge which was fueled by meme coin enthusiasm and regulatory optimism.
DeFi witnesses significant growth
November also saw a 33.7% growth in DeFi Total Value Locked (TVL) as on-chain activity grew in anticipation of regulatory reforms. Solana, Base and Sui emerged as the top gainers with 43.4%, 32.9%, and 54.0% TVL growth rates respectively.
Solana hit the record of $8.8B in TV due to retail and institutional inflows from contributors like liquidity providers Raydium and Drift, along with liquid staking protocols like Binance Staked SOL (BNSOL), Sanctum and Jito. This supported the Solana network's expansion of on-chain volumes.
Real-world assets drove the growth, as seen in Chainlink witnessing a 14.450% surge in developer activity as its infrastructure bridged blockchain networks with real-world data
The DeFi TVL of Base touched $3.4 billion which marks a 33.4% increase because of user participation in borrowing and lending markets. Uniswap also saw a 55.4% surge in TVL as it integrated with Arbitrum and Base, which strengthened its position in the liquidity market.
Uniswap also crossed 9.2 million daily transactions, which shows its scalability.
Sui also hit a record TVL of $1.6B as Sui-based chains experienced strong capital rotation. Projects like Cetus AMM, Navi Protocol, and Scallop Lend stood out along with Suilend, which had 86.5% TVL growth. All this highlighted the Sui network's appeal to the DeFi sector.
NFTs grow despite an oversaturated market
The Non-Fungible Tokens (NFTs) rose 57.6% in its sales volumes as it crossed $0.5 billion for ETH NFTs. However, higher-value and fewer consolidations are happening as unique sellers and buyers dipped 24.7%
The NFT market remains oversaturated, as 98% of the newly launched NFT projects were unprofitable. This shows potential challenges in sustaining market engagement and profitability.
While Doodles rebounded with 584% growth, Ethereum collections got mixed results, with CryptoPunks experiencing a 141.4% surge. However, innovative projects like Courtyard.io are drawing attention as it recorded 3,500 daily sales on average.
The BRC-20 protocol and Ordinals drove Bitcoin NFTs to a 220% increase in volume. Collections like NodeMonkes and ArtBlock registered major gains.
Meanwhile, other chains like BNB, Polygon, and Solana saw 48.1%, 28.6%, and 19.3% growth, respectively.
All these trends highlight the bullish dynamics of the broader crypto market despite hurdles of profitability and sustaining engagement.