A new Binance study has delved into the recent decline in the total cryptocurrency market capitalization, revealing structural factors affecting the sector. Despite a partial recovery, the market remains 14% below its March peak.
The report attributes the June downturn of 11.4% to significant Bitcoin selling pressures from German and US governments. Germany sold 50,000 BTC confiscated from a movie piracy case, while the US moved 3,940 BTC, compounding the selling pressure.
Binance’s research highlights a “Capital, People, and Technology (CPT)” framework, indicating a decline in capital inflows. This has led to increased competition among crypto firms for limited returns, affecting stablecoin supply and exchange liquidity.
However, the report suggests hope for recovery. Positive catalysts such as reducing inflation, cutting interest rates, and introducing new capital flows, including the approval of Ethereum ETFs on July 23, could revive the market and boost its capitalization beyond its March peak.
