Crypto Markets See 83% Rebound in Q1 2023, Data Shows

• Crypto markets rebounded in Q1 2023, increasing market capitalization by 83% quarter-on-quarter. Ethereum and BNBChain emerged as the most deflationary networks during this period.
• Ethereum generated the highest revenue of $457 million, followed by Hedera with a 489% increase in QoQ revenue growth.
• Tron had the highest price-to-sale (P/S) ratio of 16x, while BNBChain and Ethereum were the most deflationary networks with respective rates of -5.4% and -0.2%.

Crypto Markets Rebound

Data released by Messari focusing on layer 1 blockchain analysis during Q1 2023 show that the market capitalization of leading chains rebounded by 83%. This is despite their market cap still being down 58% year-on-year. Among these featured level 1s, Ethereum was the clear leader, boasting a market cap over twice that of other networks combined.

Ethereum Generates High Revenue

The cryptocurrency market experienced a rebound in Q1 2023 which resulted in an average increase of 83%. The high usage and gas fees propelled Ethereum to generate the highest revenue in the quarter totaling $457 million—nearly 2.8x that of other featured L1s. Hedera also saw significant revenue growth with a 489% increase QoQ due to its consensus service.

Network Financial Ratios

The report delved into financial ratios for each network to better understand their respective market positioning. Among them, Tron held the highest price-to-sales (P/S) ratio at 16x followed closely by Ethereum at 188x—an interesting outlier being WAX whose P/S ratio stood out due to NFT marketplace fees even though its market capitalization was outside of top 20 networks.

Deflationary Networks

In terms of token inflation rates, only BNBChain and Ethereum emerged as having more deflationary tendencies with respective rates of -5.4% and -0.2%. This deflation was due to burning a portion of transaction fees while other networks displayed varying inflation rates due to PoS reward issuance. Most tokens have fully vested among these networks except Avalanche, Hedera, NEAR Protocol and Harmony who all had distinct percentages for unlocked genesis supply excluding staking rewards.

Conclusion

Overall transaction activity did not witness significant growth in Q1 2023 but staking activities surged across multiple blockchains including Bitcoin SV (+14%), Polkadot (+7%), NEAR Protocol (+6%) etc., indicating increased user engagement with DeFi protocols to capitalize on yield farming opportunities or locking up crypto assets for staking rewards from validator nodes on these chains