Arcane Research’s 2022 year-end report says 2022 will be the second worst performing year for Bitcoin (BTC), with the major cryptocurrency falling 65% over the course of the year, down from the 73% recorded in 2018. defeated only by decline.
BTC had the second worst performance of the year compared to Binance Coin (BNB), Ethereum (ETH), S&P 500 and Gold. ETH recorded the heaviest drop, falling 69%. Gold was the most resilient, registering a meager 1% decline.
The growth of cryptocurrency exchange Binance was another highlight of 2022. Binance’s dominance in BTC spot trading volume increased by 47% over the course of the year, with current market share increasing from 45% recorded on day one to 92%.
Binance accounted for 66% of crypto perp volume and 61% of BTC derivatives volume at the end of 2018. Exchanges registered a 10% increase in both areas compared to 49% and 56% at the beginning of the year.
The report predicts that Binance’s dominance in the spot market will decline and BUSD’s dominance will increase.
Correlation between BTC and Stocks
Correlation between BTC and other stocks is also very high in 2022. This report looks at annual correlations between BTC and Nasdaq, S&P 500, Gold, DXY, and ETH since 2017.
The data showed that the correlation between BTC and ETH has been strong since 2017. However, 2022 was the first year that BTC showed a strong correlation with other stocks.
BTC’s correlation with the Nasdaq remained strong throughout the year at 0.59, followed by the S&P 500 at 0.56. However, the report expects the correlation between BTC and other assets to decline in the coming years as cryptocurrency trading activity declines.
The market cap of stablecoins relative to BTC will also grow exponentially in 2022, rising from 15% at the beginning of the year to 41%.
The report argues that there is a self-evident explanation for the growing dominance of stablecoins. It said:
“Cryptocurrency valuations have deteriorated this year and stablecoins have remained stable.”
The combined market cap of stablecoins represents 28% of the combined market cap of BTC and ETH, and 17% of the market cap of cryptocurrencies. That percentage was 10% and 6% at the beginning of the year.